THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


THE  PASSING 
OF  THE  TARIFF 

BY 
RAYMOND  L.  BRIDGMAN 

Author  of  "World  Organization,"  etc. 


BOSTON 
SHERMAN,  FRENCH  &  COMPANY 

1909 


Copyright  1909 
Sherman,  French  6-  Company 


Printed  in  U.  S.  A. 


376 


t 


NOTE 


Acknowledgment  is  due  for  permission  to  use 
in  this  volume  articles  which  appeared  originally  in 
Magazine  form ;  to  the  New  England  Magazine 
for  "  Publicity  for  Favored  Interests,"  pub- 
lished in  the  number  for  December,  1905 ;  to  the 
Atlantic  Monthly,  for  "  The  New  Tariff  Era," 
published  in  the  number  for  April,  1907 ;  and  to 
Moody's  Magazine,  for  "  Free-Trade  Protec- 
tion," published  in  the  number  for  February, 
1907,  and  for  "  Taxation  of  Trade  Destruc- 
tive," published  in  the  number  for  August,  1907. 

Grateful  acknowledgment  is  made  to  Professor 
Garrett  Droppers  of  the  Chair  of  Political 
Economy  in  Williams  College  for  the  substance 
of  the  last  chapter  of  the  book. 

No  one  should  read  into  this  book  a  purpose 
which  it  never  had,  nor  condemn  it  for  omitting 
what  it  was  never  intended  to  include.  Its  pur- 
pose is  not  to  set  forth  anew  the  old  principles 
which  have  been  so  admirably  made  clear  by  many 
previous  writers.  When  those  principles  are 
mentioned  it  is  because  they  are  necessarily  in- 
cidental to  the  main  purpose  of  the  book,  which 
is  to  show  that  strong  forces  are  acting  to  de- 
stroy the  tariff  system  completely,  to  encourage 
those  who  are  fighting  for  the  removal  of  arti- 
ficial obstructions  to  trade  and  prosperity,  to  in- 


64:5S57 


o  K''y 


THE  PASSING  OF  THE  TARIFF 

form  those  who  are  not  familiar  with  the  bright 
signs  of  the  times,  to  arouse  those  who  are  in- 
different or  hopeless,  to  chaDenge  those  who  op- 
pose, and  to  make  friends  of  all. 

R.  L.  B. 


CONTENTS 

CHAP.  PAGE. 

I.  The  Passing  of  the  Tariff    .      .        1 
II.  The  New  Takiff  Era       .      .      .14 

III.  The  Campaign  Against  Privilege     34 

IV.  Countrymen  Sacrificed  for  For- 

eigners      48 

V.  Obstruction's  CHAiiLENGE  to  Sci- 
ence     64 

VI.  Injustice  of  the  Tariff  ...      78 
VII.  International  Justice      ...      94 
VIII.  Labor's  Altered  Status  .      .      .    109 
IX.  Capital's  Altered  Status      .      .    123 
X.  Publicity  for  Favored  Interests  140 
XI.  Free-Trade  Protection   .      .      .    161 
XII.  "  Protection  "  Illustrates  Suc- 
cessful Self-service     .       .      .    178 
XIII.  Trade-Taxation  Destructive      .    183 
XIV.  The  Depression  of  1907  ...    193 
XV.  Two  Incompatible  Policies    .      .    198 
XVI.  Substitutes  for  Tariff  Revenue  211 
XVII.   Seen  and  Unseen  Taxes  .       .       .    217 
XVIII.  The    World's    Right    to    Low- 

Priced  Goods 222 


CONTENTS 

CHAP.  PAGE. 

XIX.  The    World's    Right    to    Good 

Wages  and  Profits  ....    231 

XX.  World  Unity  and  World  Trade  239 

XXI.  World  Trade  and  World  Peace  254 

XXII.  When    Tariff   Reduction   Comes  265 


THE  PASSING  OF  THE  TARIFF 


CHAPTER  I 
THE  PASSING  OF  THE  TARIFF 

Every  few  years  a  rebellion  against  the  tariff 
breaks  out  among  the  people  of  the  United  States. 
It  is  sharp,  determined  and  based  upon  principles 
strengthened  by  self-interest.  It  fails,  and  then 
the  tariff  men  proceed  to  raise  the  duties  still 
higher.  Even  such  a  success  of  the  rebels  at  the 
polls  as  the  sweeping  victory  of  1892,  which  put 
Grover  Cleveland  intojthe  presidential  chair  for 
the  second  time,  amounted  to  nothing  in  practical 
results,  with  few  exceptions  for  a  short  time,  be- 
cause the  high  tariff  men,  through  the  aid  of 
those  singular  persons  known  as  protection  dem- 
ocrats, succeeded  in  destroying  the  merit  of  the 
tariff  reform  legislation  so  thoroughly  that  Pres- 
ident Cleveland  refused  to  identify  himself  with 
the  perversion  of  the  victory  which  the  tariff  re- 
formers ought  to  have  enjoyed,  and  he  permitted 
the  bill  to  become  law  without  his  signature. 
Afterward,  when  the  tariff  men  returned  to 
power,  the  Dingley  act  raised  the  high  duties  of 
the  McKinley  tariff  to  a  higher  level,  and  today 
the  country  carries  on  commerce  under  the  heav- 
iest restrictions  ever  put  by  our  laws  upon  in- 
ternational trade. 

Cycles  of  rising  prices,  which  are  the  natural 
consequence  of  distributing  the  alleged  benefits 
1 


2       THE  PASSING  OF  THE  TARIFF 

of  the  tariff  through  the  community  until  all 
people  have  their  just  proportion  of  the  ad- 
vance, result  periodically  in  popular  unrest  under 
the  conviction  that  prices  are  too  high  to  be  en- 
dured (though  this  cause  is  only  one  with  others 
and  not  the  most  potent)  and  then  rebellion 
against  the  supposed  cause  of  the  prosperity 
breaks  out  again.  This  rebellious  attitude 
spread  through  the  country  for  several  years  be- 
fore the  presidential  campaign  of  1908,  as  the 
tariff  continued  its  evident  effects  of  raising  the 
fortunes  of  the  few  and  of  increasing  the  bur- 
dens of  the  many,  until  political  leaders  realized 
that  open  outbreak  could  not  be  restrained  much 
longer.  It  is  a  vital  question  for  the  people  of 
the  United  States  whether  the  purposed  rebellion 
shall  result,  as  every  previous  one  has  resulted, 
in  utter  defeat  for  the  rebels  and  in  the  imposi- 
tion of  still  higher  tariff  duties,  or  shall  bring 
a  permanent  victory  which  shall  never  suffer  a 
complete  reaction  in  the  sentiment  of  the  nation, 
no  matter  what  financial  calamities  occur  in  con- 
sequence of  violations  of  the  obscure  and  com- 
plicated laws  of  trade  and  of  the  production  and 
distribution  of  goods. 

Our  country  does  business  today  under  cir- 
cumstances very  different  from  those  which  ex- 
isted when  the  first  tariff  was  enacted.  Condi- 
tions have  changed  greatly  even  since  the  civil 
war.  From  the  outbreak  of  the  last  tariff  rebel- 
lion in  1892  to  the  present  there  has  been  a  con- 


THE  PASSING  OF  THE  TARIFF      3 

stant  growth  of  elements  which  have  a  vital  bear- 
ing upon  the  tariff  policy.  Forces  are  at  work 
which  tend  to  bring  the  world  more  and  more 
closely  together.  The  good  old  days  of  the 
"  home  market "  theory  are  receding  into  the 
oblivion  of  distance,  and  ideas  are  finding  ac- 
ceptance which  will  put  the  tariff  permanently 
on  the  shelf  as  a  relic  of  barbarism,  with  slavery 
and  polygamy.  Obstruction  to  trade,  such  as 
the  tariff  presents,  cannot  exist  permanently  in 
the  light  of  the  ideas  which  are  becoming  pre- 
dominant in  the  business  world.  Trade  between 
the  nations  will  flow  as  freely  as  it  does  between 
our  sovereign  states  and  there  are  bright  indica- 
tions that  the  tariff  is  passing  away  forever. 
Discouraged  tariff  reformers  are  skeptical,  but 
there  is  plenty  of  light  for  their  gloom. 

Self-interest,  it  must  be  admitted  with  regret, 
plays  a  far  larger  part  in  the  tariff  agitation 
than  pure  principle.  Unselfish  devotion  to  the 
public  welfare  apart  from  personal  and  local  con- 
siderations is  by  no  means  the  most  powerful 
force  in  the  conflict.  When  the  Home  Market 
Club  made  its  brilliant  dinner  demonstration, 
with  speakers  including  the  president  of  the 
United  States,  members  of  his  cabinet  and  dis- 
tinguished men  of  other  circles,  it  mustered  from 
1500  to  1800  finely  appearing  beneficiaries  of  the 
tariff  who  represented,  in  their  own  persons  and 
in  their  own  fortunes,  the  advantage  which  a 
few,  at  least,  derive  from  the  general   obstruc- 


4       THE  PASSING  OF  THE  TARIFF 

tion  of  trade.  But  when  the  American  Free 
Trade  League  musters  its  largest  host  they  are 
barely  one  in  twenty  compared  with  the  Home 
Market  men,  and  no  president  or  cabinet  officer 
puts  his  legs  under  their  table,  but  only  college 
professors,  or  men  whose  fortunes  have  been  hurt 
by  the  tariff,  or  (and  for  the  most  part)  those 
who  insist  that  principle  stands  higher  than  per- 
sonal benefit,  and  that  the  welfare  of  the  whole  is 
of  more  consequence  than  the  aggrandizement  of 
the  few.  In  the  year  ending  November  1,  1908, 
the  Home  Market  Club  spent  $15,902  for  its 
cause.  Such  a  sum  for  the  American  Free  Trade 
League  would  be  to  its  secretary  the  eighth  won- 
der of  the  world. 

But  self-interest  has  entered  upon  a  new  era. 
This  is  not  because  of  the  tariff,  but  in  spite  of 
it.  Business  all  over  the  world  is  becoming  more 
and  more  independent.  Cables  under  all  oceans 
bring  all  continents  together  so  that  the  deeps 
are  no  longer  obstacles  to  communication,  but 
only  to  transportation.  All  countries  are  put 
under  tribute  for  the  supplies  of  our  own,  more 
than  ever,  and  we  are  learning  the  lesson  that 
we  cannot  sell  unless  we  buy.  The  self-interest 
which  has  fostered  the  tariff  is  finding  its  salva- 
tion in  discarding  its  theory  of  limiting  itself  by 
the  boundaries  of  our  country  and  is  recogniz- 
ing that  no  limits  short  of  those  of  the  world  it- 
self are  reasonable  in  its  efforts  to  find  wider 
markets    for    its    home    productions.     The    Free 


THE  PASSING  OF  THE  TARIFF       5 

Trade  League  is  about  to  find  itself  distanced  in 
the  race  by  the  men  who  have  been  the  supporters 
of  the  Home  Market  Club.  This  operation  of 
self-interest  alone  will  decide  the  issue,  and  the 
commercial  world  will  work  out  its  salvation  on 
commercial  lines. 

But  there  are  other  considerations  to  prove 
that  the  power  of  the  tariff  is  waning,  and  they 
are  as  much  higher  than  the  commercial  as  jus- 
tice to  all  is  higher  than  selfishness  grasping  all 
it  can  for  self,  regardless  of  justice. 

Our  people,  bom  with  personal  liberty,  can 
with  difficulty  realize  the  deep  and  expansive 
meaning  of  their  unspeakable  right  so  freely  ex- 
ercised. Nor  can  we,  accustomed  to  the  enjoy- 
ment of  its  fruits  every  day,  adequately  under- 
stand how  much  of  them  we  owe  to  its  stimulus. 
Our  very  circumstances  stir  us  to  do  our  best. 
Our  exceptional  opportunities  are  largely  those 
of  our  own  making.  It  is  the  theory  of  our  laws, 
which  we  realize  in  practice  with  increasing  ful- 
ness as  the  laws  become  more  eff'ective  in  opera- 
tion, that  every  worker  shall  receive  the  equiva- 
lent of  his  work.  Fortunes  rise  under  the  in- 
spiration of  seeing,  in  one's  own  hand,  the 
equivalent  of  the  toil  of  the  hand,  directed  by 
all  the  ability  of  the  brain. 

But  in  other  countries  where  personal  liberty 
is  far  less,  where  government  is  despotic,  where 
property  rights  are  insecure,  where  officials  plun- 
der  the   people    and   where   robbery,   theft   and 


6       THE  PASSING  OF  THE  TARIFF 

fraud  are  not  restrained  by  the  inefficient  gov- 
ernments, are  incalculable  millions  of  hands  rela- 
tively unproductive,  of  brains  stupefied  by  tyr- 
anny, and  thus  of  possible  opportunities  un- 
improved. Body,  mind  and  soul  rest  under  bur- 
dens which  such  human  liberty  as  we  enjoy  would 
remove.  After  such  removal,  in  every  such  lo- 
cality, wealth  would  increase  rapidly.  Peoples 
now  impoverished  would  become  our  customers 
in  abundance.  Lands  now  able  to  send  us  but 
little  would  fill  our  returning  steamships  with 
overflowing  cargoes.  Human  liberty  alone  would 
work  such  a  transfomiation,  in  conjunction  with 
the  other  forces  now  operative  all  over  the  world. 
Now  the  overthrow  of  the  barriers  of  trade  on 
our  part  would  tend  to  the  dissemination  of  our 
ideals  of  liberty,  even  more  than  at  present,  in 
every  part  of  the  world.  If  we  have  a  mission 
higher  than  to  make  dollars  out  of  our  fellow 
men,  especially  out  of  those  with  whom  we  trade 
and  with  whom  we  are  in  constant  friendly  con- 
tact, it  is  to  give  them  the  stimulus  of  the  same 
ideals  as  have  made  us  free  and  strong.  The 
direct,  speedy  and  inevitable  consequences  of  our 
throwing  down  our  trade  barriers  would  be  to  ad- 
vance the  cause  of  human  liberty  in  other  parts 
of  the  world  as  knowledge  of  our  country  and 
familiarity  with  its  practical  accomplishments 
should  become  familiar  to  other  peoples,  and  we 
should  add  much  to  the  progress  of  the  world 
toward  the  highest  fonn  of  political  institutions. 


THE  PASSING  OF  THE  TARIFF       7 

Ideas  spread  quickly  whci*c  the  mind  is  receptive, 
and  the  desperate  struggles  of  millions  in  dif- 
ferent parts  of  the  world,  even  in  these  modem 
years,  for  a  small  portion  of  liberty  such  as  we 
enjoy  proves  how  quickly  a  response  would  fol- 
low the  outside  stimulus  and  how  the  world  would 
leap  forward  in  the  race. 

But  there  is  a  still  higher  and  stronger  reason 
why  the  tariff  obstruction  should  be  removed. 
Tariff  men  will  doubtless  deny  it,  but  it  is  true, 
and  it  is  a  truth  greater  as  truth  than  any  man 
is  as  man.  Let  it  be  said  here,  as  it  is  said  else- 
where, that  truth  is  one,  harmonious  and  indi- 
visible. We  separate  truth  into  truths  only  be- 
cause of  our  intellectual  littleness.  We  classify 
science  under  the  heads  of  different  sciences  only 
because  our  minds  are  not  broad  enough  to  com- 
prehend science  as  a  whole.  Financial,  commer- 
cial and  religious  truths  are  equally  parts  of  one 
stupendous  whole  —  if  the  use  of  the  words 
"  parts  "  and  "  whole  "  in  relation  to  infinity  be 
permitted,  for  they  are  the  best  words  in  the 
English  language  to  symbolize  the  idea.  If  the 
tariff  is  right  financially,  industrially  and  com- 
mercially, then  it  is  Christian.  If  it  is  wrong  in 
these  respects,  then  it  is  un-Christian  and  it  is 
worthy  of  the  persistent,  determined  and  effective 
opposition  of  all  who  would  work  for  the  spread 
and  triumph  of  Christianity. 

Affirmation  is  made  here  that  the  tariff  is 
wrong  financially,  industrially  and  commercially 


8       THE  PASSING  OF  THE  TARIFF 

and  therefore  that  it  is  inconsistent  with  true 
rehgion  —  using  the  word  in  a  sense  broad 
enough  to  include  all  moral  and  religious  truth,  no 
matter  with  what  system  of  religion  it  is  identi- 
fied. Being  irreligious,  therefore,  it  must  be 
wrong  in  every  other  aspect,  must  be  destructive 
of  rights  and  property  and  is  to  be  opposed  as 
long  as  a  vestige  remains. 

Passing  over  the  Avell  known  fact  that  the  tar- 
iff owes  its  existence  to  the  scramble  of  selfish 
interests  at  Washington  and  that  if  it  were  left 
to  the  unmanipulated  judgment  of  the  nation 
while  those  interests  did  not  lift  a  finger  it  would 
be  abolished  as  soon  as  the  bill  could  be  pushed 
through  both  branches  of  Congress  and  carried 
to  the  White  House,  let  it  be  assumed  here  that 
every  tariff  man  is  acting  from  motives  of  the 
highest  patriotism,  that  he  desires  to  see  only 
the  welfare  of  his  country  as  a  whole,  and  that 
if  that  welfare  demands  the  removal  of  the  tariff 
he  will  consent  as  readily  as  he  now  insists  that 
the  tariff  must  be  retained.  Only  such  a  degree 
of  patriotism  can  be  accepted  by  a  nation  of 
patriots  in  considering  the  tariff  policy  for  the 
whole  nation,  and  any  citizen  who  acts  for  selfish 
interests  primarily  puts  himself  beyond  consid- 
eration. 

Now,  as  to  the  religious  standard  of  action. 
The  Master  himself  said :  "  Thou  shalt  love  thy 
neighbor  as  thyself."  The  chief  apostle  wrote: 
*'  For  the  whole  lavr  id  fulfilled  in  one  word,  even 


THE  PASSING  OF  THE  TARIFF        9 

in  this,  Thou  shalt  love  thy  neighbor  as  thy- 
self." The  Golden  Rule  says :  "  Do  unto  oth- 
ers as  ye  would  that  others  do  unto  you."  The 
Master  did  not  say :  "  Thou  shalt  love  others 
better  than  thyself."  An  even  balance  between 
self  and  others  is  to  be  held,  and  both  are  to  be 
given  equal  justice.  But  every  tariff  man  who 
professes  to  act  from  love  of  country  as  superior 
to  self-interest  knows  and  realizes,  that  it  would 
be  profitable  to  the  foreigners  If  our  markets 
were  thrown  wide  open  to  them.  There  is  not  the 
slightest  doubt  upon  that  proposition  in  the  mind 
of  either  a  tariff  obstructionist  or  a  free  trader. 
The  tariff  man  would  view  with  horror  the  con- 
sequences to  this  country,  but  he  has  no  misgiv- 
ings regarding  the  profit  to  accrue  to  the  men 
who  could  deliver  their  goods  free  of  duty  at  our 
wharves.  As  a  patriot,  he  would  save  all  the 
profit  to  our  country  and  not  permit  foreigners 
to  share  it.  He  regards  our  markets  as  our  prop- 
erty, to  which  only  our  own  people  have  title, 
and  the  foreigner  who  would  break  into  them 
stands  in  the  same  light  to  him  as  a  burglar  who 
should  break  into  his  house. 

But  this  claim  of  exclusive  property  rights  in 
our  own  markets  is  unsound.  It  violates  the  very 
fundamental  truth  in  the  creation  of  mankind  of 
one  blood. 

The  question  goes  deeper  than  the  claim  of  one 
people  to  exclusive  possession  of  the  territory 
they    occupy.     There    is    a    oneness    of   mankind 


10       THE  PASSING  OF  THE  TARIFF 

which  overrides  the  claims  to  national  exclusive- 
ness.  European  nations  and  the  United  States 
are  acting  upon  that  truth,  blindly,  to  be  sure, 
in  their  policy  toward  China  in  breaking  down 
the  Chinese  wall  of  exclusiveness.  It  is  a  true 
principle  that  nations  have  no  right  to  shut  other 
nations  out,  or  to  shut  themselves  in,  or  to  shut 
individuals  out  or  in  who  are  law-abiding.  Not 
only  is  such  a  course  folly,  but  it  flies  in  the  face 
of  that  sovereignty  of  all  mankind  which  is  a 
fact,  but  an  ignored  fact  yet  to  be  established 
as  the  fundamental  truth  in  the  relations  of  na- 
tions. No  nation  has  a  right  to  exclusive  pos- 
session of  its  own  markets,  and  each  has  the  right, 
as  a  member  of  the  human  family,  to  insist  upon 
its  own  admission  to  the  markets  of  others  as 
freely  as  it  throws  open  its  own. 

Love  and  justice  to  the  neighbor,  both,  de- 
mand, as  a  religious  principle  of  action,  that 
equal  opportunity  be  afforded  to  trade  from 
whatever  source  it  comes.  The  tariff  violates  the 
fundamental  principle  of  religion  in  the  relations 
of  men.  It  deliberately  refuses  to  hold  an  even 
scale  of  justice  between  the  home  citizen  and  the 
foreigner.  Judged  by  the  standard  which  the 
ruling  people  of  this  country  profess,  the  tariff 
is  irreligious,  immoral  and  destructive  of  justice. 
Therefore,  in  a  world  where  the  right  wins, 
those  who  support  such  a  proposition  in  the  light 
of  religious  truth  and  in  opposition  to  the  forces 
which  make  for  justice  to  the  weak  as  well  as  to 


THE  PASSING  OF  THE  TARIFF      11 

the  strong,  might  as  well  fight  against  the  stars 
in  their  courses.  Inevitable  defeat  awaits  them. 
As  rapidly  as  true  religion  makes  its  way  in  the 
world,  in  the  full  force  of  its  genuine  spirit, — 
not  in  the  clouded  comprehension  of  men  still  un- 
der the  spell  of  national  all-sufficiency  —  so 
surely  is  the  tariff  passing  away.  That  spirit 
of  self-sacrifice  which  impels  men  and  women  to 
consecrate  property  and  life  for  the  spread  of 
the  good  news  also  impels  them  to  exert  all  their 
influence  for  the  overthrow  of  the  unjust,  di- 
visive and  destructive  obstruction  to  the  welfare 
of  the  nations  which  is  appropriately  named 
"  tariff  "  from  "  Tarifa,"  a  nest  of  robbers. 

It  is  true  that  the  tariff  policy  seems  more 
strongly  intrenched  today  in  the  policy  of  the 
nation  than  ever,  judged  by  the  relative  amount 
of  the  duties  levied  upon  imports.  It  is  true  that  in 
England  there  seems  to  be  less  general  acceptance 
of  the  free  trade  truth  than  a  generation  ago. 
It  is  true  that  the  other  great  nations  of  the 
world  hold  tenaciously  to  the  theory  that  their 
own  welfare  is  to  be  promoted  by  putting  ob- 
stacles in  the  way  of  the  free  exchange  of  prod- 
ucts put  upon  the  market  under  the  most  favor- 
able conditions. 

But  it  is  further  and  emphatically  true  that 
the  nations  are  entering  upon  a  new  era  in  their 
relations  with  each  other,  and  that  even  a  hun- 
dred years  are  but  few  in  the  onward  sweep  of  the 
human  race.     Forces  which  the  nations   obey  as 


12        THE  PASSING  OF  THE  TARIFF 

completel}'  as  the  ocean  currents  obey  the  mighty 
cosmic  impulses  which  drive  them  long  distances 
are  urging  the  nations  forward  into  a  com- 
munity of  self-interests  as  permanent  and  as 
evident  as  the  unity  and  self-interests  of  the 
states  of  the  United  States.  International  con- 
ferences at  The  Hague  mean  the  political  unity 
of  mankind,  and  with  that  will  come  commercial 
unity  and  financial  unity,  just  as  surely  as  such 
unity  has  already  been  attained  by  our  own  sov- 
ereign states  whereby  no  obstruction  to  trade  is 
permitted  between  them  and  where  friendly  in- 
tercourse overpowers  all  causes  of  antagonism 
and  smothers  all  beginnings  of  hostility. 

Protection  has  reached  its  climax.  Its  giant 
strength  is  already  enmeshed  in  the  subtle  and 
strong  web  of  forces  which  will  bind  its  hands 
and  feet,  which  will  overmaster  its  struggles, 
which  will  put  an  end  to  its  selfish  and  unwise 
activity,  and  will  finally  strangle  its  life  out  al- 
together. Its  doom  is  inevitable  as  certain  as 
there  is  progress  among  men.  Slavery  in  the 
United  States  was  at  its  zenith  when  it  fell  to  its 
utter  destruction.  It  dominated  the  politics  of 
the  country.  It  stifled  men's  consciences,  as  far 
as  political  majorities  were  concerned,  even  in 
such  a  pioneer  antislavery  state  as  Massachusetts. 
It  paralyzed  their  courage  and  it  made  even  its 
opponents,  except  the  leaders,  accept  compro- 
mises rather  than  stand  up  and  fight.  The  dollar 
was  supreme  over  the  bodies  and  souls  of  black 


THE  PASSING  OF  THE  TARIFF      13 

men.  What  has  happened  once  may  happen 
again.  It  would  not  be  strange  if  the  next  re- 
bellion against  the  obstruction  of  trade,  against 
the  promoter  of  monopoly  and  against  the  im- 
poser  of  unjust  taxes  should  be  successful. 


CHAPTER  II 
THE  NEW  TARIFF  ERA 

Never  have  the  customs  duties  of  the  United 
States  been  raised  to  a  higher  average  than 
now.  From  the  tiny  beginning  of  five  per  cent, 
in  revolutionary  days,  the  protected  interests 
nave  gradually  been  able  to  increase  the  barrier 
against  imports  from  other  countries  until  the 
average  is  more  than  ten  times  as  high  as  was 
thought  satisfactory  by  the  early  legislators  for 
the  protection  of  infant  industries. 

This  wall  seems  now  to  be  as  high  as  it  can 
possibly  reach.  Already  it  seems  toppling  from 
top-heaviness,  and  it  Is  a  fair  question  whether 
it  would  not  be  stronger  If  some  of  the  top 
courses  were  removed.  Popular  opinion  has  sus- 
tained It  thus  far,  judging  from  the  election  re- 
turns ;  but  popular  opinion  is  gathering  tremen- 
dous strength  against  enormous  aggregations  of 
wealth,  and  it  seems  quite  probable  that  this 
opinion  will  be  directed  against  the  tariff  within 
a  few  years.  No  obser^Tr,  however,  can  question 
today  the  complete  success  of  the  high  protective 
policy,  judged  by  what  it  has  been  able  to  put 
upon  the  statute  book.  There  the  law  is,  all  free 
trade  argument  to  the  contrary  notwithstanding. 

Simultaneously  with  this  crowning  vlctor^'^  of 
the  highest  tariff  known  to  our  history  must  be 

14 


THE  NEW  TARIFF  ERA  15 

recorded  the  lowest  depth  of  defeat  for  the  school 
of  political  economy  which  has  opposed  it.  No 
weight  in  the  popular  mind  seems  to  attach  to 
the  doctrines  which  were  taught,  a  generation 
ago,  by  the  colleges  and  universities  as  the  solid 
foundations  of  truth  in  the  economic  world. 
Laissez-faire,  which  was  the  shibboleth  then,  is 
now  practically  discarded.  If  it  was  a  sound  and 
successful  doctrine  for  an  era  of  free  competition 
of  producers  in  the  markets  of  the  world,  yet  its 
propounders  had  no  conception  of  the  present 
conditions,  when  competition  has  run  its  legiti- 
mate course  and  ended  in  monopoly  so  absolute 
that  it  holds  nations  in  its  grip  and  strangles 
every  one  who  struggles  to  set  himself  free. 

In  those  days  that  was  held  to  be  the  best  gov- 
ernment which  governed  least.  It  was  taught 
that  the  function  of  government  was  to  give  fair 
play  to  competition  and  to  keep  its  hands  off  the 
competitors.  Laissez-faire  was  fitted  for  days  of 
competition ;  and  when  competition  was  stifled  b}'^ 
monopoly  the  people  instinctively  felt  that  to  say 
"  laissez-faire "  to  monopoly  meant  commercial 
and  industrial  slavery  to  them,  as  it  surely  did. 
Hence  it  was  inevitable  that  the  old  school  of 
free  trade  should  cease  to  convince  the  thought- 
ful, and  it  was  equally  inevitable  that  it  should 
be  rejected  by  the  average  voter  of  the  country 
when  he  came  to  vote  for  a  policy  to  be  put  in 
operation  by  the  government. 

A   staggering  blow  was  delivered  to  the   old 


16     THE  PASSING  OF  THE  TARIFF 

school  by  the  panic  which  followed  the  presiden- 
tial election  of  1892.  Democratic  victory,  mean- 
ing a  reduction  of  the  tariff,  in  November  of 
that  year,  followed  by  the  inauguration  of  Presi- 
dent Cleveland  for  the  second  time  on  March  4, 
1893,  and  the  commercial  crash  of  May,  1893, 
a  precursor  of  hard  times  which  did  not  end  for 
a  long  period  —  hard  times  attended  by  city 
soup  kitchens  in  many  places  and  by  clamorous 
armies  of  the  unemployed  —  fixed  indelibly  in  the 
minds  of  many  thousands  Avho  voted  the 
Democratic  ticket  the  belief  that  the  Demo- 
cratic victory  was  the  cause  of  the  hard  times. 
Though  well-informed  men  know  that  the  same 
catastrophe  would  have  occurred  if  President 
Harrison  had  been  reelected;  though  Republican 
leaders  doubtless  know  that  their  party  would 
have  suffered  equally  if  it  had  been  successful ; 
yet  some  of  those  leaders  have  never  since  then 
failed  to  assert  that  the  hard  times  were  a  direct 
consequence  of  Democratic  victory,  and  to  this 
day  there  is  no  stronger  argument  against  tariff 
reform  in  many  minds  than  mention  of  the  panic 
of  1893.  Since  then,  among  the  mass  of  voters, 
free  trade  as  a  political  policy  has  been  beyond 
mention.  That  election  marked  the  end  of  the 
era  of  the  laissez-faire  theory  as  a  force  to  be 
reckoned  with  in  politics. 

Since  then,  there  has  been  no  logical  coherence 
in  the  campaign  argument  against  high  protec- 
tion, except  the  self-interest  of  those  who  think 


THE  NEW  TARIFF  ERA  17 

they  see  opportunity  to  make  more  money  by, 
lowering  the  tariff.  As  a  party  of  opposi- 
tion, the  Democrats  have  opposed  the  high- 
tariff  Repubhcans,  but  the  tariff  was  not  heard 
of  as  a  genuine  issue  in  the  presidential 
campaigns  of  1896  and  1900.  Every  muscle 
was  strained  over  the  currency  —  the  question 
whether  Bryan  and  silver  should  win.  Theoreti- 
cal free  trade  was  no  more  concerned  than  the 
theory  of  the  northwest  passage.  The  old  force 
was  dead,  and  it  is  impossible  for  it  to  revive. 

Revival  of  the  old  theory  is  impossible,  further, 
because  the  men  who  held  it  entertained  the  same 
inadequate  idea  of  the  functions  of  government 
which  is  today  entertained  by  the  business  men 
who  control  the  high-tariff  wing  of  the  Republi- 
can party  and  dominate  the  legislation  of  the 
countr3\  Old-time  free  traders  held  that  gov- 
ernment should  be  reduced  to  the  lowest  possible 
terms.  Today  the  high  protectionists  want  the 
government  to  keep  hands  off  and  let  them  alone, 
after  they  have  secured  the  highest  tariff  the 
country  has  even  known.  Business  men  gener- 
ally dislike  interference  with  business  conditions 
on  the  part  of  the  people.  They  desire  strongly 
that  Congress  and  the  state  legislatures  should 
meet  as  infrequently  as  possible,  and  do  as  little 
as  possible.  They  fail  as  utterly  as  the  laissez- 
faire  men  failed  in  their  time  to  comprehend  the 
function  of  the  government  as  a  means  of  serv- 
ice of  the  people  by  the  people ;  they  cannot  un- 


18     THE  PASSING  OF  THE  TARIFF 

derstand  that  it  is  far  more  and  far  higher  than 
a  poHce  force  to  preserve  order,  in  the  sunhght 
of  which  the  business  men  are  to  accumulate  their 
fortunes  in  peace  and  to  exercise  their  full  facul- 
ties for  the  exploitation  of  their  fellow  men. 
These  two  classes  are  at  one  in  their  desire  that 
the  government  keep  its  hands  off  the  business 
communit}',  and  henceforth  it  is  hopeless  to  look 
for  a  revival  of  the  old  theory  of  free  trade. 

If  the  let-alone  theory  were  sound,  then  every 
head  of  a  family  must  be  his  own  bacteriologist, 
miscroscopist  and  sanitation  expert ;  he  must  be 
the  schoolmaster  to  educate  liis  children ;  he  must 
contract  with  private  corporations  to  carry  his 
letters  across  the  continent  and  around  the  world. 
If  it  is  an  unsound  policy  for  the  people,  through 
official  servants,  to  protect  themselves  against 
disease  and  ignorance,  but  should  leave  it  to  their 
self-interest  to  sharpen  their  wits  and  to  save 
them  from  the  blind  destruction  of  nature  and 
the  cunning  heartlessness  of  their  fellow  men, 
then  all  our  progress  of  recent  years  has  been  in 
the  wrong  direction.  But  if  it  is  a  sound  policy 
to  educate  the  children  at  public  expense,  to  carry 
letters  b}"^  public  servants,  to  have  sanitary  rules 
for  the  salvation  of  rich  and  poor  alike  from  the 
devastations  of  pestilence,  then  it  is  also  a  sound 
policy  to  protect  the  public  from  fraud  and  loss 
by  supervision  of  insurance  companies,  savings 
banks,  trust  companies,  national  banks  and  pub- 


THE  NEW  TARIFF  ERA  19 

lie  service  corporations  of  every  sort.  It  is  with 
many  limitations  that  whatever  truth  there  is  in 
the  let-alone  theory  is  to  be  applied.  Our  na- 
tion is  growing  away  from  it  and  the  govern- 
ment is  wisely  putting  its  hand  more  and  more 
upon  the  business  conduct  of  great  aggregations 
of    capital. 

Opposition  to  protection  is  rising  powerfully, 
and  it  is  evident  that  a  new  era  in  the  contest  has 
opened.  The  nation  has  learned  the  lesson,  even 
if  the  laissez-faire  men  have  not.  This  is  not 
because  the  nation  is  the  more  intelligent;  but 
inevitably  the  very  force  of  circumstances  has 
compelled  favorable  action  upon  measures  of  the 
highest  importance  to  the  welfare  of  the  nation. 
Without  apparent  intelligent  action  upon  the 
true  proposition  regarding  the  nature  of  the 
government,  as  contrasted  with  the  hands-ofF 
theory,  the  necessary  steps  have  been  taken. 
Popular  demands  for  governmental  control,  for 
restraint  in  one  direction,  for  supervision  in  an- 
other, for  the  use  of  the  taxing  power  for  the 
benefit  of  localities,  and  so  on  in  a  thousand 
ways,  have  made  it  clear  that  that  is  not  the  best 
government  which  governs  least,  which  keeps  its 
hands  off  and  permits  the  people  to  become  the 
victims  of  sharpers  or  take  the  consequences,  but 
that  which  watches  for  the  welfare  of  the  peo- 
ple. Former  objectors,  some  of  whom  survive 
to  the  present,  use  the  term  "  paternalism "  in 


so     JHE  PASSING  OF  THE  TARIFF 

describing  this  function  of  the  government.  But 
epithets  do  not  scare  a  nation  which  knows  what 
it  wants. 

In  truth,  this  action  of  tlie  government  is  not 
patemaHsm  at  all,  in  the  opprobrious  sense. 
Rather,  it  is  self-service  of  the  people.  It  is  the 
line  along  which  all  modem  governments  are  de^ 
veloping.  It  seems  to  be  established  already  as 
the  true  and  necessary  line  of  advance,  whether 
the  government  be  representative,  democratic,  or 
monarchical,  that  there  shall  be  an  equipment  of 
the  political  body  with  organs  which  were  not 
needed  and  were  not  known  in  the  days  when  the 
laissez-faire  school  was  strong,  and  when  its  oppo- 
nents were  young.  In  modern  times  there  has  been 
developed  the  system  of  national  and  state  boards 
and  commissions  for  the  control  of  public-service 
activities  of  the  body  politic  and  for  the  service 
of  the  people,  which  establish  to  the  observing 
mind  the  truth  that  government  is  certain  to  be- 
come a  far  more  highly  complex  organism  than 
at  present;  that  these  organs  are  legitimate  for 
the  proper  ser^acc  of  the  people,  and  that  jus- 
tice and  prosperity  are  to  be  secured  only  as  they 
are  found  in  active  operation,  when  modem  con- 
ditions are  present  as  they  exist  in  the  most  ad- 
vanced countries. 

Again,  in  recent  years  there  has  been  a  phe- 
nomenal development  in  the  popular  mind  of  the 
doctrine  of  governmental  ownership,  or,  at  least, 
governmental    regulation    of   natural    monopolies 


THE  NEW  TARIFF  ERA  21 

and  of  public-service  corporations.  The  busi- 
ness community  does  not  accept  this  theory. 
The  laissez-faire  school  is  opposed  to  it  on  prin- 
ciple. But,  whether  or  not  the  theory  is  sound, 
the  country  is  practicing  it  and  is  evidently  de- 
termined to  practice  it  far  more  extensively. 
To-day  ideas  are  deemed  conservative  in  this  field 
which  were  radical  ten  years  ago.  The  presi- 
dent of  the  United  States  has  been  apparently 
leading  the  entire  mass  of  the  people,  with  the 
exception  of  the  business  men  whose  personal  in- 
terests make  them  oppose  him,  in  a  movement  for 
governmental  regulation  of  the  railroads.  Cor- 
porations must  come  under  the  control  of  the 
government.  In  many  ways  the  idea  is  making 
advances  from  point  to  point.  Having  a  secure 
foundation  in  the  postoffice  department,  strength- 
ened by  the  general  practice  of  municipal  water 
supplies,  by  public  highways,  by  successful  gov- 
ernment of  railroads  and  electric  roads  in  other 
countries,  and  by  other  practicable  propositions 
which  have  been  demonstrated,  the  idea  marches 
on,  making  converts,  and  establishing  with  ap- 
parently invincible  strength,  a  theory  of  govern- 
mental function  which  is  totally  contrary  to  the 
old  order  of  things.  Hence,  again,  a  new  era  in 
the  tariff  contest  has  begun. 

Other  considerations  tend  to  show  how  distinct 
is  the  new  era  of  tariff  discussion  from  that  which 
seems  to  have  closed.  People's  minds  are  be- 
coming  familiar  with  the  idea  that  it  is   sound 


22     THE  PASSING  OF  THE  TARIFF 

policy  for  the  government  to  do  things  which  are 
opposed  by  the  old  theory  of  free  competition. 
This  very  circumstance,  in  the  nature  of  the  ar- 
gument, tends  plausibly  toward  the  governmental 
support  of  industries.  If  it  is  for  the  govern- 
ment to  engage  in  business  enterprises  for  the 
service  of  the  people,  it  would  not  be  wise  to  con- 
demn the  new  policy  as  a  failure  —  so  the  argu- 
ment runs  —  until  it  has  had  a  fair  chance  to 
vindicate  itself.  For  a  time,  therefore,  the  in- 
dustry under  the  management  of  the  government 
is  an  infant  industry.  Hence  it  is  that  the  ten- 
dency of  the  times  toward  governmental  regula- 
tion or  ownership  has  been  a  powerful  reinforce- 
ment of  the  argument  for  the  protection  of  in- 
fant industries.  It  is  doubtless  not  the  fact  that 
the  high  protectionists  are  in  favor  of  govern- 
mental regulation  or  ownership  of  public-service 
utilities.  They  are  not  that  class  of  men ;  they 
belong  positively  to  the  class  who  oppose  any 
such  function  on  the  part  of  the  government. 
But  the  development  of  our  institutions  has  put 
into  their  hands  an  argument  most  powerful  with 
the  mass  of  the  voters,  in  defense  of  the  proposi- 
tion that  it  is  sound  doctrine  and  a  paying  policy 
for  the  government  to  give  pecuniary  aid  to  busi- 
ness enterprises  which  are  trying  to  establish 
themselves.  All  the  prodigious  popular  preju- 
dice against  corporation  control  and  in  favor  of 
governmental  management  or  ownership,  is 
thrown  upon  the  protectionist  side  by  forces  to 


THE  NEW  TARIFF  ERA  2S 

which  the  protectionists,  as  a  class,  are  stoutly 
opposed.      Such  is  the  strange  political  situation. 

Still  again,  another  phase  of  the  situation  has 
been  developed  which  was  not  foreseen  by  those 
who  held  to  the  doctrine  of  free  competition  and 
hands  off  by  the  government.  It  was  recog- 
nized by  President  Roosevelt  in  his  recommenda- 
tion for  more  taxation  upon  the  swollen  fortunes 
of  the  times.  Under  the  stimulus  of  a  condition 
where  a  man  is  no  longer  reckoned  a  millionaire 
who  has  a  million  dollars'  worth  of  property; 
but  only  the  man  whose  annual  income  is  at  least 
a  million,  there  has  grown  a  strong  demand  for 
taxation  by  the  government  to  make  the  enor- 
mous fortunes  bear  their  share  of  the  public  bur- 
dens. Income  taxes  or  direct  inheritance  taxes, 
one  or  both,  are  in  the  minds  of  the  public  as 
remedies  to  be  applied  to  the  situation.  With 
the  experience  of  foreign  countries  in  collecting 
each  of  these  taxes,  with  the  support  in  influential 
circles  which  the  proposition  has  received,  and 
with  the  popular  indignation  against  the  tax- 
dodgers,  it  seems  reasonable  to  predict  that  be- 
fore long  there  will  be  on  the  statute  books  of 
nation  and  states,  one  or  both,  stringent  legis- 
lation —  now  merely  in  the  air  —  which  will 
yearly  bring  many  million  dollars  into  the  public 
treasury. 

Now,  the  tariff  has  its  two  distinct  phases. 
First,  that  of  protection  to  infant  industries  in 
order  to  promote  the  industrial  prosperity  of  the 


24       THE  PASSING  OF  THE  TARIFF 

country.  In  this  sense,  it  is  supposed  by  its 
friends  to  act  as  a  fertilizer  spread  upon  a  field. 
It  secures  a  larger  and  quicker  crop  than  would 
be  possible  without  it.  In  its  other  aspect  it  is 
a  matter  of  taxation,  a  method  of  raising  money 
for  the  support  of  the  government.  That  is,  it 
is  parallel,  to  continue  the  agricultural  simile,  to 
taking  a  har\'est  from  the  land.  These  two 
functions  of  the  tariff  are  as  distinct  as  the  ap- 
plication of  fertilizer  and  the  har\'esting  of  a 
crop,  and  the  ideas  should  be  kept  absolutely  sep- 
arate in  the  mind. 

But,  if  there  is  a  radical  change  in  taxation, 
in  order  to  spare  the  country  the  evils  of  enor- 
mous wealth  under  the  control  of  one  man,  that 
change  will  reduce  the  amount  of  money  required 
to  be  raised  by  the  government  by  means  of  the 
tariff,  for  the  payment  of  its  running  expenses. 
Reduction  will  be  possible,  either  in  the  amount 
of  internal  revenue,  or  in  the  customs  receipts; 
and  the  establishment  of  taxation  of  incomes  and 
inheritances  must  raise  the  question  whether  the 
tariff  should  not  be  reduced.  If  the  money  is 
not  needed  for  government  expenses,  why  should 
it  be  taken  from  the  people?  The  raising  of 
the  issue  will  accentuate  the  contest  over  infant 
industries,  and  it  will  be  a  new  question  whether 
the  infant  will  ever  be  old  enough  to  get  along 
without  its  bottle;  but  the  mere  raising  of  the 
question  proves  that  there  has  been  a  shifting  of 
the  fighting  ground  over  the  tariff,  and  that  a 


THE  NEW  TARIFF  ERA  25 

new  era  is  here,  which  is  the  point  to  be  empha- 
sized at  present. 

Certainly  it  may  be  said  that  the  fact  that  the 
issue  of  reducing  the  tariff  will  be  raised  if  in- 
come and  inheritance  taxes  are  levied  will  be  a 
powerful  provocative  to  many  people  to  oppose 
the  levying  of  such  taxes ;  while  the  exasperation 
of  the  masses  of  the  people  at  the  continued 
dodging  of  just  taxes  will  be  a  spur  to  popular 
leaders  to  force  the  fighting.  At  any  rate,  some- 
thing more  will  be  done  than  to  try  to  use  burnt 
powder  in  the  coming  struggle. 

One  of  the  most  compelling  reasons  for  affirm- 
ing that  a  new  tariff  era  is  opening  is  the  de- 
velopment which  has  taken  place  in  the  manu- 
facturing of  the  country.  This  makes  directly 
against  the  present  high  tariff  and  strengthens 
greatly  those  who  are  demanding  revision  in  or- 
der that  they  may  have  larger  markets  abroad.  It 
must  be  remembered  that  this  question  of  en- 
larging our  foreign  markets  is  vital  to  our  pros- 
perity. Its  force  has  been  recognized  by  plenty 
of  men  who  have  upheld  the  high  protection  doc- 
trine. When  there  was  apprehension  that  the 
helpless  body  of  inert  China  would  be  carved  up 
among  the  nations  which  were  ready  to  rush  in, 
and  when  the  enormous  population  of  China  was 
pictured  to  the  mind  of  the  United  States  ex- 
porter, there  was  a  lively  appreciation  of  the  im- 
portance of  keeping  the  door  of  China  open. 
We  went  to   war  for  the  Philippines,   and  our 


26     THE  PASSING  OF  THE  TARIFF 

entire  Philippine  policy  >yas  shaped  by  the  sup- 
posed necessity  of  keeping  an  open  door  for  our 
trade  in  China.  It  is  notorious  that  United 
States  manufacturers  have  had  two  prices  for 
their  customers  —  one  a  higher  price  which  they 
charged  to  their  friends  and  neighbors  at  home, 
and  a  lower  price  which  they  charged  to  stran- 
gers abroad.  In  the  much-advertised  case  of  the 
watch  trade,  American  manufactures  were  sold 
so  much  cheaper  abroad  that  American  watches 
were  imported  from  London,  paying  the  duty, 
and  then  sold  in  New  York  for  less  than  the 
price  charged  for  similar  articles  which  were  sold, 
without  the  benefit  of  two  voyages  across  the 
ocean,  to  the  home  customers  of  the  manufactur- 
ers. In  many  lines  of  manufacture  this  prac- 
tice has  become  a  matter  of  general  knowledge, 
and  the  figures  are  well  j^roven.  This  has  caused 
a  new  element  in  the  case  —  a  material  modifica- 
tion of  former  tariff  conditions. 

Our  trade  seeks  the  markets  of  the  world. 
Our  exports  have  more  than  doubled  in  value  in 
less  than  twenty  years.  We  are  able  to  make 
much  more  than  we  are  now  making.  But  we 
are  learning  the  lesson  that  foreigners  cannot 
buy  of  us  unless  they  can  also  sell  to  us.  They 
must  have  a  market  for  their  goods  if  we  are  to 
have  a  market  for  ours.  More  and  more  of  our 
manufacturers  realize  this  fundamental  condi- 
tion of  international  trade.  Consequently  there 
is  a  growing  demand,  which  will  not  take  no  for 


THE  NEW  TARIFF  ERA  27 

an  answer,  that  our  tariff  be  so  far  reduced  that 
foreign  producers  may  find  a  better  market  here. 

This  is  the  inspiration  of  the  movement  which, 
for  several  years,  ahnost  reached  the  point  of 
poHtical  rebelHon  in  Massachusetts  and  Iowa, 
and  is  gaining  strength  for  the  impending  en- 
counter. This  element  cares  nothing  for  the  the- 
ories of  political  economy.  These  men  merely 
see  a  market  which  they  want  and  which  they 
can  have  if  we  lower  our  tariff.  Here,  again, 
is  an  element  which  emphasizes  the  fact  that  we 
are  in  a  new  era  of  tariff  discussion. 

Under  the  head  of  the  new  tariff  era,  too, 
comes  the  belief  that  the  tariff  fosters  the  trusts. 
Though  this  belief  has  been  growing  for  years, 
yet  the  conditions  which  cause  it  did  not  exist 
to  an  appreciable  extent  when  the  leaders  of  the 
old  school  propounded  the  principles  which  they 
affirmed  to  be  at  the  foundation  of  political  econ- 
omy. Prejudice  against  the  tariff  as  the  mother 
of  trusts  has  steadily  grown  in  its  hold  upon 
the  public  mind.  This  view  is  supported  by  stu- 
dents of  the  question.  For  instance.  Professor 
A.  W.  Flux,  speaking  upon  trusts  at  the  gath- 
ering at  Brown  University  on  December  28, 
1906,   in  the  Economic  Association,   said, — 

"  It  should  not  be  claimed  that  all  trusts  are 
creatures  of  the  tariff.  But  it  may  be  claimed 
that  the  extent  to  which  trusts  can  fix  prices  for 
their  own  gain  and  to  the  essential  disadvantage 
of  the  communities  in  which  they  operate  is  de- 


28       THE  PASSING  OF  THE  TARIFF 

pendent  on  the  existence  of  and  the  level  of  the 
tariff  under  which  they  operate.  Thus  we  may 
find  reason  in  the  claim  that  though  trusts  exist 
in  free-trade  England,  their  power  for  evil 
is  comparatively  small,  though  far  from  unim- 
portant." 

That  the  status  of  trusts  in  free-trade  England 
is  different  from  that  in  protective  America  is 
evident  from  the  breaking  down  of  the  soap 
trust  in  England,  solely  because  of  popular  op- 
position and  a  general  boycott  of  its  products. 
Yet  it  ought  to  be  easier  for  trusts  to  maintain 
monopoly  in  England  than  in  the  United  States, 
because  the  territory  to  be  covered  is  so  much 
smaller  and  combination  is  so  much  easier.  It 
is  true  that  in  this  country  the  protected  inter- 
ests affirm  that  the  tariff  does  not  promote  ex- 
tortionate aggregations  of  capital.  It  is  true 
that  the  issue  is  political,  and  that  people  will 
believe  about  it  very  much  as  they  vote.  It  is 
true  that  the  numerous  laboring  classes  which 
are  employed  by  the  protected  interests  have  a 
personal  reason  for  taking  sides  with  their  em- 
ployers upon  the  matter,  and  thus  altering  the 
usual  alignment  of  one  class  against  the  other. 

But,  in  spite  of  these  facts,  the  fundamental 
condition  remains  that  the  tariff  was  designed 
to  prevent  competition  from  abroad  and  does 
prevent  it  partially,  and  that  it  reduces  the  num- 
ber of  establishments  which  must  come  to  an  un- 
derstanding in  order  to  establish  a  working  mo- 


THE  NEW  TARIFF  ERA  29 

nopoly.  Under  such  circumstances  popular  be- 
lief in  the  tariff  as  the  mother  of  trusts  is  bound 
to  increase.  Here,  therefore,  is  another  reason 
for  affirming  that  there  is  a  new  tariff  era,  that 
the  old  days  will  never  return,  and  that  the  con- 
test is  to  be  fought  upon  different  lines,  with 
new  and  perhaps  stronger  forces  brought  into 
collision,  with  probably  better  chances  for  the 
opponents  of  the  high  tariff. 

But,  again,  the  list  of  new  forces  is  not  ex- 
hausted, though  the  one  next  to  be  mentioned  is 
yet  but  feebly  operative.  It  is  as  sure  to  gain 
strength,  however,  as  the  world  is  to  progress, 
and  therefore  it  must  be  counted.  Much  has 
been  said  about  reciprocity,  and  in  different 
quarters  the  proposition  of  "having  maximum 
and  minimum  tariffs  is  advanced  as  sound  na- 
tional policy.  Stripped  of  its  Latin  flowing 
robe,  the  naked  idea  is  this :  "  If  you  favor 
me,  I  will  favor  you;  but  if  you  fight  me,  I  will 
fight  you."  Our  country  has  had  sufficient  ex- 
perience in  commercial  war  to  learn  the  lesson 
of  its  destructiveness  to  both  combatants,  if  we 
only  would  learn  the  lesson.  Under  Jefferson 
we  had  the  embargo  on  trade  with  Great  Britain. 
Our  experience  then  was  sufficient  to  teach  us 
the  folly  of  commercial  war.  Indeed,  its  folly 
is  now  recognized  more  generally  than  ever.  It 
is  safe  to  say  that  our  business  men  dread  it, 
and  that  they  sincerely  hope  that  the  threat  of 
retaliatory  duties,  as  a  club,  will  be  sufficient  to 


30      THE  PASSING  OF  THE  TARIFF 

bring  an  objecting  nation  to  terms.  But  when 
it  comes  to  retaliatory  duties,  we  are  sensitive, 
and  the  small  prospect  of  commercial  war  with 
Germany,  when  that  country  —  irritated  beyond 
endurance  by  our  high  tariff  which  discriminates 
against  the  admission  of  German  manufactures 
to  this  country  —  proposed  to  retaliate  against 
us,  proves  that  we  really  do  not  desire  commer- 
cial war.  We  hate  to  lose  our  trade  with  Ger- 
many, amounting  to  $200,000,000  a  year.  We 
understand  better  than  our  fathers  that  commer- 
cial war,  like  military  war,  involves  loss,  destruc- 
tion, and  international  hatred  for  both  parties ; 
that  it  is  a  great  evil,  not  to  be  lightly  invited, 
and  that  we  had  better  yield  some  points  than 
refuse  to  see  any  justice  in  the  demands  of  the 
other  nation. 

When  the  French  parliament  proposed  to  in- 
crease from  $1.50  to  $5  per  100  kilos  the  duty 
on  cottonseed  oil  imported  from  the  United 
States ;  but  to  raise  the  duty  to  only  $2.80  for 
imports  from  those  countries  which  have  trade 
treaties  with  France,  the  secretary  of  the  Ameri- 
can Cotton  Oil  Company  said, — 

*'  It  is  plain  to  be  seen  that  foreign  govern- 
ments are  becoming  incensed  because  of  the  fact 
that  our  protective  tariff  makes  it  impossible  to 
sell  to  the  United  States.  The  matter  is  a  serious 
one.  The  solution  of  the  difficulty  lies  in  a  modi- 
fication   of   the   tariff.      Other   expedients   might 


THE  NEW  TARIFF  ERA  31 

bring  desirable  results,  but  they  would  not  strike 
at  the  root  of  the  trouble." 

That  is,  we  fight  them  commercially,  and  they, 
after  long  endurance  of  our  hostility,  retaliate; 
atid  immediately  we  realize,  in  some  degree,  how 
we  should  feel  if  we  were  in  their  places.  More- 
over, we  are  frightened  at  the  prospective  loss 
of  our  trade  and  want  to  negotiate.  We  are 
surprised  because  we  cannot  shut  out  foreigners 
from  our  markets  and  invade  theirs  at  the  same 
time,  without  a  protest  on  their  part.  We  be- 
gin to  realize  that  commercial  war  would  be  dis- 
astrous, more  disastrous  than  we  had  supposed 
before  the  nations  which  we  attacked  made  a 
counter  attack  upon  us ;  and  we  desire  to  reach  a 
friendly  understanding.  That  is  the  meaning  of 
the  talk  about  a  maximum  and  minimum  tariff. 
This  phase  of  the  situation,  with  its  enforced 
realization  that  it  may  be  to  our  profit  to  reduce 
our  duties,  belongs  to  the  new  era;  and  again 
the  effect  of  the  forces  in  action  is  against  the 
high  tariff. 

One  further  force  may  well  be  enumerated 
with  the  others  which  distinguish  the  new  tariff 
era,  though  it  is  but  weak  at  present,  indeed,  al- 
most unrecognizable.  But  it  is  surely  destined 
to  become  mighty,  perhaps  the  very  strongest  of 
them  all.  That  is  the  force  wliich  is  making 
for  the  organization  of  the  world  into  one  polit- 
ical body.     Already  this  organization  has  begun 


32     THE  PASSING  OF  THE  TARIFF 

to  take  form  in  the  legislative,  judicial,  and  ex- 
ecutive departments.  One  of  the  leading  diplo- 
mats of  the  United  States,  perhaps  better  quali- 
fied than  any  other  to  express  an  appreciative 
opinion,  sajs  that  the  prediction  of  this  outcome 
of  present  world-activities  is  true  prophecy.  Al- 
ready international  bodies  have  enacted  what  has 
become  world-legislation  in  over  thirty  instances. 
The  establishment  of  the  Hague  Court  of  Arbitra- 
tion was  an  act  of  world-legislation.  The  codifi- 
cation of  international  law  is  a  world  need,  recog- 
nized by  jurists,  and  was  formally  proposed  by 
the  Interparliamentary  Union  for  consideration 
by  the  second  Conference  at  The  Hague.  The 
proposed  international  prize  court  promises  to 
be  the  germ  of  a  true  world-judiciary.  The  ex- 
ecutive department  of  the  world  has  an  existing 
germ  In  the  permanent  office  of  the  Universal 
Postal  Union,  and  other  similar  germs  already 
exist. 

Higher  and  more  august  than  national  sov- 
ereignty Is  the  sovereignty  of  the  world  as  one 
political  body.  Progress  toward  the  realization 
of  this  Ideal  has  been  marvelously  rapid  since 
the  beginning  of  the  present  century,  and  the 
time  may  be  nearer  than  the  indifferent  imagine 
when  the  world  will  be  a  true  political  unit.  Then 
the  question  of  trade  will  assume  the  form  it  has 
in  this  country  —  trade  between  states,  sover- 
eign In  some  respects,  of  which  the  United  States 
is  composed.      That  point  of  view  will  reveal  the 


THE  NEW  TARIFF  ERA  33 

untenable  ground  of  legislating  for  particular 
countries,  with  hostile  intent  toward  the  com- 
merce and  industry  of  all  others.  It  is  reason- 
able to  predict  that  this  force  in  the  tariff  arena 
will  yet  prove  to  be  the  master  of  the  situation, 
before  which  all  others  must  yield. 

No  possible  doubt  can  be  entertained  how  that 
force  will  develop  as  a  power  for  free  trade. 
Hence,  again,  it  is  clear,  not  only  that  we  are 
in  a  new  tariff  era,  but  that  this  era  will  be  revolu- 
tionary. Its  outcome  will  not  only  be  different 
from  that  of  all  previous  eras,  but  the  conclu- 
sion will  be  final  and  will  establish  for  the  world 
trade  conditions  which  will  remain  permanent  as 
long  as  the  world  endures  —  conditions  under 
which  trade  will  be  free. 


CHAPTER  III 

THE  CAMPAIGN  AGAINST  PRIVILEGE 

Something  there  is  about  the  tariff  which  pro- 
vokes chronic  opposition.  Peace  is  never  per- 
manent for  its  champions.  Though  they  may 
gain  a  sweeping  victory  in  a  popular  election 
and  may  seem  at  last  to  have  converted  a  large 
majority  of  the  voters  to  their  views,  yet,  in  a 
few  years,  at  the  longest,  the  conflict  is  raging 
again.  Something  about  the  tariff  persistently 
impresses  itself  upon  thoughtful  men  as  unfair 
to  the  mass  of  the  people,  as  a  matter  of  justice, 
and  as  unsound,  as  a  matter  of  public  policy. 
Something  about  it,  too,  continually  comes  up 
afresh  to  make  the  mass  of  the  people  wrathy 
against  it,  even  though  they  may  seem  to  have 
been  made  permanent  high  tariff  supporters  by 
such  a  calamity  as  the  hard  times  following  the 
panic  of  1893,  which  was  successfully  charged 
upon  the  Democratic  administration  by  its  Re- 
publican opponents,  and  which  turned  scores  of 
thousands  of  low  tariff  men  peinnanently  to  the 
high  tariff  side.  But  new  voters  have  come  for- 
ward and  again  the  high  prices  of  an  era  of  gen- 
eral prosperity,  which  was  seriously  checked  by 
the  depression  beginning  in  October,  1907,  have 
caused  a  prodigious  outcry  against  the  tariff,  as 
34. 


CAMPAIGN  AGAINST  PRIVILEGE      35 

they  did  in  the  national  campaigns  of  1890  and 
1892. 

One  presumption  against  the  tariff  stands  as 
a  rock  in  a  tide,  though  it  is  often  completely 
buried  by  the  rush  of  waters.  It  is  the  perma- 
nent and  well  known  fact  that  the  most  thorough 
investigations  and  studies  of  the  colleges  and  uni- 
versities pronounce  in  favor  of  unobstructed 
trade  as  the  wisest  policy  for  a  nation  to  pur- 
sue. Protectionists  who  send  their  sons  to  col- 
lege do  not  expect  that  they  will  accept  the  teach- 
ing of  free  trade  authorities.  College  graduates 
who  become  protectionists  renounce,  if  they  can- 
not disprove,  the  teachings  of  their  professors. 
In  this  field  alone,  of  all  subjects  of  thorough 
research  and  reflection,  the  logical  processes  of 
the  human  mind  are  deliberately  and  persistently 
rejected  as  worthless,  though  this  is  an  age  when 
the  triumph  of  mind  is  most  loudly  proclaimed. 
In  the  United  States,  the  power  of  wealth,  as  well 
as  the  power  of  votes,  has  been  on  the  side  of  the 
doctrine  of  obstruction  of  trade  by  a  tariff,  to 
the  discredit  of  the  human  intellect,  as  illus- 
trated by  trained  thinkers  in  this  particular 
field.  Probably  there  is  no  other  instance  so  con- 
spicuous where  the  judgment  of  the  expert  is 
thrown  aside  and  the  opinion  of  selfish  interests 
substituted. 

But  the  weight  of  the  tariff  profits  cannot 
forever  keep  the  lid  of  agitation  down.     The  ex- 


36      THE  PASSING  OF  THE  TARIFF 

plosive  power  of  the  restrained  forces  of  justice 
and  sound  public  policy  increases  by  repression, 
for  they  are  forces  which  are  eternally  active 
in  their  very  nature,  and  the  clattering  of  the 
lid  which  they  constantly  produce  compels  the 
attention  of  the  men  who  would  persuade  the 
public  that  no  other  policy  is  right  than  that 
the  people  should  be  taxed  in  order  that  out  of 
the  product  of  the  taxes  a  portion  may  be  re- 
turned to  a  part  of  the  public,  while  the  tariff 
beneficiaries  retain  the  remainder. 

In  the  new  tariff  era  a  fresh  strength  has  ac- 
crued to  the  antitariff  side  because  of  the  in- 
creasing popular  belief  that  the  tariff  beneficia- 
ries are  a  privileged  class.  This  new  force  against 
the  tariff  is  not  scientific.  It  is  sentimental.  It 
is  not  asserted,  as  a  part  of  the  presentation  here, 
that  this  feeling  is  just.  It  exists.  That  is 
warrant  enough  for  considering  it.  It  may  be 
unreasoning.  It  may  be  blind  to  the  true  inter- 
est of  the  voters  who  entertain  it.  But  it 
changes  votes.  Therefore  it  must  be  reckoned 
with. 

If  the  countrjf  still  feels  the  effect  in  favor  of 
protection  which  was  caused  by  the  era  of  de- 
pression following  the  Democratic  victory  of 
1892,  it  is  equally  true  that  the  country  still  re- 
members, as  a  partial  offset,  the  notorious  "  fry 
the  fat "  circulars  issued  by  the  Republican  man- 
agers in  the  campaign  of  1888.  There  is  this 
difference*  between   the   situations    of*  those   two 


CAMPAIGN  AGAINST  PRIVILEGE      37 

presidential  campaigns  —  that  Democratic  lead- 
ers, as  well  as  students  of  the  nation's  financial 
history,  insist,  with  plausible  backing  of  facts, 
that  the  panic  of  1893  was  in  no  way  due  to  the 
Cleveland  administration,  but  was  the  inevitable 
consequence  of  Republican  errors,  especially  in 
regard  to  silver,  and  the  policies  of  the  Harrison 
administration,  whereas  both  the  republican 
managers  in  1888  and  their  democratic  opponents 
regarded  the  protected  manufacturers  as  encased 
in  fat  laid  on  by  the  operation  of  laws  for  which 
the  beneficiaries  had  paid  by  previous  campaign 
contributions.  To  the  collectors  of  the  repub- 
lican campaign  fund  it  seemed  to  be  a  fair  prop- 
osition that  some  of  this  excess  of  wealth  should 
be  demanded  as  a  gift  in  order  to  keep  in  office 
the  party  which  would  continue  the  fat-creating 
policy.  Accordingly  the  orders  were  issued  to 
get  some  of  the  fat,  even  if  it  had  to  be  fried 
out.  That  such  a  proportion  of  the  tariff  bene- 
ficiaries objected  to  contributing  what  the  man- 
agers thought  was  a  fair  sum  till  they  had  been 
put  into  the  frying  pan  only  increased  republi- 
can contempt,  as  well  as  democratic,  for  that 
species  of  citizen,  and  it  helped  to  promote  the 
belief  which  exists  in  both  republican  and  demo- 
cratic circles  today  that  the  tariff  beneficiaries 
get  more  than  their  just  dues  out  of  the  tariff 
policy. 

If  they  get  more  than  their  fair  share,  it  fol- 
lows that  other  persons  and  other  classes  get  less 


38       THE  PASSING  OF  THE  TARIFF 

of  the  benefits  of  the  tariff  tlian  they  ought  to 
receive  —  conceding,  for  the  moment,  that  the 
tariff  confers  benefits,  for  this  situation  does  not 
involve  in  any  degree  the  issue  of  the  soundness 
of  the  tariff  pohcy.  For  the  present  only  one 
point  is  in  dispute  —  the  just  distribution  of  the 
alleged  benefits.  Facts  are  not  available  as  much 
as  desired  for  the  settlement  of  the  dispute  be- 
cause the  tariff  beneficiaries  will  not  give  them. 
It  is  an  inseparable  part  of  their  policy  to  con- 
ceal the  details  of  their  business,  though  the  en- 
tire tariff  is  based  upon  benefit  to  the  public,  not 
to  private  interests,  and  private  interests  ought 
rightfully,  when  given  special  privileges  by  the 
public,  to  be  made  publicly  accountable  to  the 
last  cent  regarding  the  details  of  their  business. 
Not  only  have  the  beneficiaries  never  proposed 
to  take  the  public  into  their  confidence,  but  they 
resist  most  strenuously  every  effort  to  bring  the 
facts  to  light.  Tliis  conduct  confirms  inevitably 
the  suspicion  that  the  beneficiaries  are  getting 
so  much  more  than  their  dues  that  they  are 
afraid  to  let  the  public  see  their  books  for  fear 
that  there  would  be  a  resistless  demand  for  a  re- 
distribution of  their  profits.  So  there  has  been 
developed  an  antagonism  which  tends  to  increase 
with  the  years,  and  the  conviction  becomes  per- 
manent in  the  public  mind  that  the  tariff  bene- 
ficiaries are  using  tlie  powers  of  the  government 
to  increase  their  private  wealth,  and  that  they  are 


CAMPAIGN  AGAINST  PRIVILEGE     39 

getting  so  much  more  than  their  share  of  the 
supposed  general  benefit  of  the  tariff  that  they 
resist  with  all  their  strength  and  craftiness  every 
effort   to   disclose   their  secrets. 

Still  further,  this  popular  belief  regarding  the 
unjust  favor  shown  to  the  tariff  beneficiaries  — 
or  captured  by  them  for  their  private  benefit  — 
is  strengthened  by  the  generally  comfortable 
style  of  living  enjoyed  by  this  class.  If,  like 
poor  people  who  must  be  supported  at  public  ex- 
pense, this  class  were  kept  in  institutions  man- 
aged at  the  public  charge,  and  were  not  entrusted 
with  providing  for  themselves,  then  popular  an- 
tagonism would  at  once  subside.  But  this  class, 
which  gets  its  property  by  direct  intervention  of 
the  government,  is  the  most  ease-taking  of 
any  class  in  the  land.  This  is  the  class  which 
has  the  money  which  can  be  fried  out.  It 
takes  the  cream  at  home,  and  it  enjoys  the  pleas- 
ures of  foreign  travel  far  more  than  most  un- 
protected members  of  the  public.  In  this  way 
the  possession  of  a  fortune  the  details  of  whose 
acquisition,  though  made  by  public  means,  are 
kept  a  persistent  secret,  is  flaunted  in  the  face 
of  the  public  constantl3^  Some  people  see  and 
remember.  Others  forget.  Others  hope  to  share 
the  same  gain  by  supporting  the  tariff  policy. 
The  result  is  mixed.  But  the  fundamental  con- 
dition is  such  that  the  smouldering  fire  may,  at 
any  time,   leap  into  flame  under  the  breath   of 


40       THE  PASSING  OF  THE  TARIFF 

financial  calamity  or  in  consequence  of  an  out- 
burst of  popular  wrath  against  the  existence  of 
a  privileged  class. 

It  is  a  timely  question  today  whether  a  per- 
manent change  has  not  occurred  in  the  popular 
temper  toward  the  tariff.  Events  indicate  it. 
President  Roosevelt's  active  antagonism  to  the 
law-breaking  corporations  is  a  precipitation 
in  concrete  fonn  of  popular  sentiment  which  has 
been  increasing  while  it  remained  in  solution  un- 
til it  reached  the  point  where,  if  the  president 
had  not  become  its  representative  and  champion, 
it  would  have  turned  and  destroyed  him.  Mr. 
Roosevelt's  popularity  is  due  largely  to  his  iden- 
tification of  himself  with  the  popular  wrath  and 
to  his  leadership  of  the  masses  against  those  men 
and  corporations  believed  to  be  the  oppressors  of 
the  public,  who,  in  order  to  accomplish  that  op- 
pression, have  become  criminal,  as  the  public  be- 
lieves. 

Class  feeling  exists  in  the  country  today  more 
than  ever.  It  is  based  upon  wealth,  not  upon 
birth,  for  our  social  system  is  such  that  the 
wealthy  are  no  better  bom  than  many  of  the 
poor.  Nor  is  it  based  upon  intellectual  ability, 
because  it  is  well  known  that  children  of  the  poor 
reach  as  much  eminence  in  genuine  power  as  the 
children  of  the  rich.  Nor  is  it  based  upon  moral 
purity  or  spiritual  exaltation,  for  the  follies  and 
scandals  of  New  York,  Newport  and  Pittsburg, 
which  have  become  a  stench  in  the  nostrils  of  the 


CAMPAIGN  AGAINST  PRIVILEGE      41 

nation,  reveal  a  depravity  among  the  rich  equal 
to  any  vice  known  to  those  under  the  harrow  of 
poverty.  Toward  this  wealth,  which  is  the  basis 
of  the  present  intensity  of  class  feeling,  exists 
today  an  abhorrence  so  strong  that  even  men 
who  come  into  direct  contact  with  it  in  social  cir- 
cles, who  have  no  occasion  for  envy,  and  no  per- 
sonal motive  for  destructiveness,  name  it  "  pred- 
atory wealth,"  and  that  name  and  "  tainted 
money  "  have  come  to  have  a  current  standing 
because  of  a  popular  idea  that  they  teU  the  truth. 
In  spite  of  the  labored  effort  in  protectionist 
quarters  to  disprove  any  connection  between  the 
tariff  and  the  trusts,  and  to  show  that  the  tariff 
beneficiaries  do  not  owe  any  of  their  fortunes  to 
an  abuse  of  the  privilege  which  the  tariff  con- 
fers, there  is  still  a  widespread  belief  that  the  dis- 
proof has  not  been  conclusive.  It  is  true  that 
political  partisanship  enters  directly  Into  the  pop- 
ular verdict.  As  the  question  Is  Inevitably  fore- 
most in  politics,  the  voters  are  materially  influ- 
enced by  prejudice  against  arguments  to  confute 
their  respective  sides.  It  is  only  natural  law 
that  the  color  of  the  glasses  should  seem  to  be  in- 
herent in  everything  seen  through  them.  But 
facts  which  are  developed  in  the  calms  between 
the  storms  of  the  campaigns  have  their  influence 
in  making  the  coloring  of  the  glasses  for  the  elec- 
tion following.  Prices  count  for  arguments  in 
the  sober  reflection  over  the  bills  of  the  landlord 
and  the  grocer.     Every  four  years  a  new  array 


42       THE  PASSING  OF  THE  TARIFF 

of  voters  marches  to  the  polls  to  stand  solemnly 
alone  with  God  and  a  load  pencil,  and  popular 
judgment  does  change  from  election  to  election. 

For  the  last  few  years  this  change  of  ground 
has  been  against  the  tariff.  It  is  this  change 
which  has  converted  leaders  among  the  republi- 
cans until  the  existence  of  distinct  wings  in  the 
party  has  been  recognized,  and  until  the  stiffest 
protectionists  themselves  admit  that  revision 
must  be  made,  and  they  only  balked  at  the  fixing 
of  a  date  when  the  work  shall  begin,  unless  it  were 
indefinitely  distant.  From  the  well  known  doc- 
trines of  the  stalwart  wing  of  the  protectionists, 
it  is  a  fair  assertion  that  they  would  never  have 
taken  this  position  without  a  strong  popular  de- 
mand, supported  by  threats  of  a  revolt  within 
their  party.  The  fact  that  they  concede  the 
point  that  revision  must  be  made  sometime  illus- 
trates how  they  feel  the  strength  of  the  present 
campaign  against  privilege. 

What  constitutes  the  real  threat  of  this  cam- 
paign against  the  entire  protective  system  is  that 
it  is  not,  in  essence,  an  Issue  between  the  republi- 
can and  democratic  parties.  Let  this  be  explained 
briefly,  in  order  to  show  that  it  is  perfectly  con- 
sistent with  the  plausible  statement  that  the  tariff 
is  the  most  living  issue  between  the  two  great  par- 
ties. The  harmonizing  of  the  seeming  contra- 
diction can  easily  be  made. 

After  the  tariff  campaign  of  1892  and  the 
consequent  democratic  victory,  after  the  business 


CAMPAIGN  AGAINST  PRIVILEGE     43 

depression  which  continued  for  a  long  time  fol- 
lowing the  spring  of  1893,  after  the  apparent 
follj  of  reducing  the  tariff  was  so  emphasized 
by  republican  leaders  that  many  thousand  voters 
who  voted  for  the  revision  policy  in  1892  will 
probably  never  do  so  again,  came  the  campaign 
of  1896,  with  silver  as  the  issue.  On  their  plat- 
form the  democrats  were  not  only  beaten,  but 
were  routed.  In  1900  the  prestige  of  Bryan  and 
the  enthusiasm  of  the  silver  men  made  silver  so 
much  the  issue  that  the  tariff  was  no  more  men- 
tioned than  the  Jefferson  embargo  as  a  subject 
to  be  settled  by  the  voters.  The  Philippine  pol- 
icy of  the  government,  though  nominally  opposed 
by  the  democrats,  really  cut  a  very  small  figure 
in  the  campaign. 

But  by  1904  the  tariff  was  again  in  sight  as 
a  political  issue.  It  was  not  there  by  virtue  of 
democratic  preaching  of  anti-tariff  doctrine.  No 
one  who  watched  the  developments  of  those  years 
from  an  impartial  point  of  view  could  have  re- 
garded the  democratic  leaders  as  other  than  op- 
portunists, on  the  lookout  for  some  rallying  cry 
against  the  administration.  Republican  business 
men  did  far  more  than  democratic  politicians  to 
revive  the  tariff  as  a  political  issue.  Meetings 
of  influential  representative  men  in  Massachu- 
setts and  Iowa,  which  were  the  centers  of  disaf- 
fection with  the  tariff,  and  a  growing  unrest  on 
the  part  of  a  large  number  of  republican  busi- 
ness  men,   illustrated   the  truth   that  there   was 


44     THE  PASSING  OF  THE  TARIFF 

something  in  the  very  fact  of  a  tariff  which  was 
contrary  to  the  permanent  prosperity  of  all  in- 
dustries and  all  business  impartially,  something 
which  could  not  stand  the  test  of  the  common 
sense  of  the  men  who  were  at  the  focus  where  the 
tariff  forces  converged  with  their  most  energetic 
action.  "  Something  is  inherently  wrong  with 
the  existing  tariff  as  a  permanent  proposition," 
was  their  conviction,  and  it  was  by  this  business 
force  back  of  the  agitation,  not  by  democratic 
leadership,  that  the  tariff  rose  again  to  view  as 
the  most  urgent  political  issue  of  the  day.  Then, 
when  this  fact  was  recognized,  the  democrats 
seized  upon  it  as  their  old-time  principle  and 
made  it  the  great  issue  in  their  platforms.  But 
if  the  tariff  had  not  caused  republican  dissension 
and  had  not  threatened  a  serious  split  in  the 
party,  of  large  importance  to  the  democrats  po- 
litically, it  would  have  sunk  out  of  sight  as  an 
issue  and  would  never  have  been  heard  from 
again.  Were  the  tariff  what  it  proclaims  it- 
self to  be,  were  it  a  genuine  promoter  of  wealth 
in  excess  of  any  other  policy,  were  it  impartial 
in  its  distribution  of  its  benefits,  did  it  appeal  to 
the  sense  of  fair  play  of  the  mass  of  the  voters, 
it  would  long  ago  have  ceased  to  arouse  opposi- 
tion. Old-time  opponents  would  have  admitted 
the  facts,  have  confessed  their  mistake,  thanked 
the  tariff  men  for  their  patriotic  perseverence 
till  the  truth  had  been  established,  rejoiced  in  the 
country's  prosperity  in  spite  of  themselves,  and 


CAMPAIGN  AGAINST  PRIVILEGE      45 

would  have  turned  thought  and  political  energy 
to  issues  which  were  really  vital. 

How  the  country  acts  when  it  is  upon  the  right 
track  in  dead  earnest  needs  no  better  illustration 
than  in  the  status  of  the  tariff  issue  under  the  low 
tariff  policy  which  prevailed  just  before  the  civil 
war.  Under  the  low  duties  there  was  a  marked 
development  of  United  States  industries.  The 
nation  was  satisfied  with  the  tariff  conditions  to 
the  extent  that  the  tariff  was  no  longer  a  polit- 
ical issue.  It  seemed  to  have  sunk  out  of  sight 
forever.  Nothing  but  the  exigencies  of  the  gov- 
ernment during  the  civil  war,  seeming  to  compel 
the  raising  of  revenue  in  every  possible  way,  led 
to  the  revival  of  import  duties  under  the  name 
of  protection.  Tariff  beneficiaries  were  quick  to 
seize  the  opportunity  to  make  the  most  of  the  ne- 
cessities of  the  war  and  such  a  foothold  was  se- 
cured by  them  that  the  tariff  policy  became  iden- 
tified with  the  republican  party  during  the  pe- 
riod following  the  war.  But  the  ante-war  ex- 
perience illustrates  how  a  right  tariff  policy  takes 
the  tariff  out  of  politics,  while  recent  occurrences 
prove  how  a  wrong  policy  keeps  it  always  in 
politics.  So  is  reached  the  explanation  of  the 
paradox  that  the  tariff  is  today  in  politics  be- 
cause it  is  not  a  political  question ;  that  is,  it  is 
a  greater  issue  than  the  politicians  comprehend. 

Being,  therefore,  a  question,  in  the  very  nature 
of  the  case,  which  will  be  a  public  issue  until  it 
is  settled  right,  it  is  bound  to  be  persistently  and 


46      THE  PASSING  OF  THE  TARIFF 

aggressively  to  the  front  unless  some  temporary 
acute  question,  like  the  silver  controversy,  over- 
shadows It.  But  it  cannot  be  permanently 
smothered  or  lived  down  until  it  proves  its  nature 
as  a  public  benefactor,  and  the  constant  revolts 
against  it  by  the  very  men  whose  party  supports 
it  illustrate  the  presence  of  a  factor  which  im- 
presses even  the  friends  of  the  tariff  as  unjust 
and  Impolitic. 

This  campaign  against  privilege,  therefore.  Is 
based  upon  permanent  conditions  which  affect 
the  popular  mind.  It  has  now  the  powerful  re- 
inforcement of  the  official  head  of  the  party 
which  holds  the  government  offices.  All  the 
strength  of  the  Roosevelt  administration,  with 
the  financial  resources  of  the  nation  at  Its  back, 
was  put  forth  In  a  contest  which  is  identified  In 
the  popular  mind  with  resistance  to  special  privi- 
lege gone  to  the  extent  of  criminality.  It  is  a 
new  status  for  the  tariff  beneficiaries,  and  stren- 
uous efforts  are  made  to  prove  that  the  tariff 
has,  and  can  have,  no  possible  causative  connec- 
tion with  the  existence  of  this  criminality  which 
President  Roosevelt  was  determined  to  punish. 
The  beneficiaries  have  not  yet  convinced  the  pub- 
lic that  the  tariff  system  Is  not  Involved  in  the 
acquisition  of  wealth  in  violation  of  fair  play  for 
all  the  people.  As  the  law  stands,  it  creates  a  fa- 
vored class,  and  it  Is  for  the  favorites  to  show 
that  they  are  such  only  in  name  but  not  In  fact. 
Present  conditions   make  the  demonstration  dif- 


CAIMPAIGN  AGAINST  PRIVILEGE     47 

ficult.  It  is  doubtful  whether  a  majority  of  the 
people  can  be  persuaded  at  all.  Never  before  was 
this  issue  so  acute  before  the  people.  In  this 
respect,  therefore,  the  country  has  entered  a  new 
era  of  tariff  agitation  with  a  fresh  and  strong 
reinforcement  for  the  opponents  of  the  high 
tariff. 


CHAPTER  IV 

COUNTRYMEN    SACRIFICED    FOR    FOR- 
EIGNERS 

At  the  head  of  the  energetic  propagandists  of 
the  high  tariff  gospel  stands  the  Home  Market 
Club.  Its  headquarters  are  in  Boston,  and  its 
membership  includes,  or  has  included,  nearly  all 
the  leading  manufacturers  in  New  England,  be- 
sides some  in  other  states.  Whatever  personal 
motive  may  put  the  energy  of  private  members 
in  operation,  there  is  no  doubt  that  the  official 
documents  and  arguments  of  the  club  are  pre- 
pared by  its  honorable  secretary  with  a  conscien- 
tious devotion  to  the  tariff  as  a  principle.  In 
the  very  name  of  this  stronghold  of  the  tariff 
theory  is  a  demonstration  of  the  distance  which 
the  country  has  moved  from  the  conditions  prev- 
alent when  the  name  was  the  one  fit  and  peculiar 
catchword  to  crystallize  the  issue  then  uppermost 
in  contending  minds.  Today  that  name  stands 
like  a  stake  by  the  edge  of  a  glacier,  showing  be- 
yond dispute  how  the  slow  mass  of  public  opin- 
ion, seemingly  rigid  and  motionless,  has  advanced 
since  that  stake  was  driven.  "  Home  markets 
for  American  goods,"  "  Keep  the  home  market 
from  foreign  invasion,"  "  Our  home  market  is 
rightfully  ours  and  it  is  unpatriotic  to  surrender 

48 


COUNTRYMEN  SACRIFICED       49 

It  to  foreigners  " —  these  were  the  appeals  made 
to  the  voters,  and  these  were  the  demands  of  the 
manufacturers  at  that  era  in  our  tariff  agitation. 
These  appeals  and  these  demands  were  successful. 
But  conditions  have  changed.  Not  only  do  the 
United  States  manufacturers  hold  the  markets 
of  the  United  States,  but  they  are  exporting 
largely  to  foreign  countries.  Every  nation  wit- 
nesses the  enterprise  of  United  States  consuls  in 
investigating  the  conditions  of  local  trade,  and 
for  years  there  has  been  publication  by  the  United 
States  government  of  the  reports  made  by  the 
official  representatives  of  the  people  of  this  coun- 
try in  all  countries  of  the  earth  regarding  the 
kinds  of  goods  for  which  there  seems  to  be  a 
particular  opening  at  any  specified  place.  In 
general,  the  United  States  consuls  abroad  seem 
to  be  more  the  business  agents  of  manufacturers 
with  goods  to  sell  than  the  poKtical  and  diplo- 
matic representatives  of  a  people  with  other  pur- 
poses toward  friendly  nations  than  exploitation 
for  commercial  profit.  In  Massachusetts,  for 
instance  —  and  it  may  be  the  fact  in  all  other 
states  —  these  consular  reports  to  the  national 
government  have  been  read  carefully  and  extracts 
have  been  printed  at  state  expense  by  the  Bureau 
of  Statistics  of  Labor  in  order  that  Massachu- 
setts manufacturers,  at  the  public  charge,  might 
be  put  in  possession  of  facts  for  their  private 
profit,  on  the  theory  that  the  supposed  distribu- 


50     THE  PASSING  OF  THE  TARIFF 

tion  of  the  profit  to  the  people  would  be  more 
than  sufficient  to>  pay  the  taxes  caused  by  the 
publication. 

Again,  whatever  the  political  or  missionary  ex- 
planations offered  after  the  fact  to  account  for 
the  war  made  by  the  people  of  the  United  States 
upon  the  people  of  the  Philippine  islands,  the 
true  cause  of  that  war  was  the  anxiety  of  the 
commercial  interests  in  the  United  States,  which 
controlled  the  political  situation,  to  secure  in  the 
PhiUppines  a  foothold  for  trade  with  China, 
whose  vast  empire,  supposed  to  be  an  exhaustless 
market  for  United  States  manufactures,  was  then 
threatened  with  dismemberment  and  exploitation 
by  the  great  buzzard  nations.  That  this  was  the 
real  reason  why  the  United  States  took  the  entire 
Philippine  archipelago  was  asserted  on  the  floor 
of  the  United  States  senate,  after  the  treaty  was 
made,  by  Senator  Cushman  K.  Davis  of  Minne- 
sota, chairman  of  the  commission  on  the  part  of 
the  United  States  which  made  the  treaty  with 
Spain  in  Paris  in  the  summer  of  1898.  A  sim- 
ilar statement  was  made  in  a  public  speech  in 
Chicago,  after  his  return  from  Paris,  by  Wliite- 
law  Reid,  another  of  the  treaty  commissioners. 
Mr.  Reid  said  at  the  Lincoln  dinner  of  the  Mar- 
quette Club,  Febmary  13,  1899:  "Would  you 
have  had  them  (the  commissioners)  throw  away 
a  magnificent  foothold  for  the  trade  of  the  far^ 
ther  East,  which  the  fortune  of  war  had  placed 
in  your  hand ;  throw  away  a  whole  archipelago 


COUNTRYMEN  SACRIFICED         51 

of  boundless  possibilities,  economic  and  stragetic ; 
throw  away  this  opportunity  of  centuries  for 
your  country?  .  .  .  They  neither  neglected 
nor  feared  the  duty  of  caring  for  the  material 
interests  of  their  own  country ;  —  the  duty  of 
grasping  the  enormous  possibilities  upon  which 
we  had  stumbled,  for  sharing  in  the  awakening 
and  development  of  the  farther  East."  And  he 
enlarged  much  upon  the  trade  possibilities. 

These  official  facts,  besides  others  and  in  addi- 
tion to  the  habitual  policy  of  the  manufacturers 
of  the  United  States  in  recent  years  in  extending 
their  foreign  markets,  illustrate  the  complete 
change  of  conditions  from  the  time  when  the  sal- 
vation of  the  home  market  was  the  rallying  cry 
of  the  anxious  protectionists.  A  permanent 
change  has  occurred  in  the  situation.  It  is  the 
imperative  demand  for  wider  markets  which  has 
made  the  dissension  within  the  republican  party. 
Realization  of  the  truth  that  foreigners  cannot 
buy  from  us  unless  they  have  something  to  buy 
with  —  that  is,  unless  they  can  sell  to  us  —  is 
at  the  bottom  of  the  irrepressible  demand  for  rec- 
iprocity treaties.  This  is  the  meaning  of  the 
constant  energy  in  the  demand  for  closer  trade 
relations  with  Canada.  It  is  the  explanation  of 
the  disturbance  over  the  outlook  that  there  would 
be  retaliation  against  us  by  Germany.  It  is  the 
bottom  of  our  arrangement  regarding  trade  with 
France.  It  is  a  factor  in  our  commercial  inter- 
course with  every  nation  whose  markets  are  con- 


52     THE  PASSING  OF  THE  TARIFF 

sidered  valuable  enough  to  be  desirable.  This  is 
the  truth  which  has  made  pliant  the  rigid  wills 
of  the  standpat  protectionists  who,  in  theory, 
could  never  see  a  time  when  the  tariff  should  need 
revision,  so  that  now,  in  political  practice,  they 
admit  the  necessity  of  making  changes  in  some  of 
the  schedules.  Old  conditions  have  passed  away. 
Home  markets,  as  the  chief  issue,  are  out  of 
sight  and  out  of  mind.  Capture  of  foreign  mar- 
kets is  the  urgent  necessity  today,  and  a  new 
tariff  era  is  here. 

But  this  new  era  has  brought  a  new  and  grave 
peril  to  the  tariff.  It  witnesses  the  sale  of  goods 
manufactured  in  the  United  States,  under  the 
protection  of  the  tariff,  to  people  of  foreign 
countries  at  lower  prices  than  to  the  people  of 
the  United  States.  Now,  the  tariff  is  maintained 
solely  on  the  ground  of  public  benefit.  Profits 
to  private  persons,  whether  partners  or  stock- 
holders, are  permitted  by  law  at  the  expense  of 
the  taxed  purchasers  of  the  goods  made  by  these 
partners  and  stockholders  only  upon  the  theory 
that  there  wiU  be  more  than  compensating  return 
for  the  taxes.  But  the  most  direct  return  con- 
ceivable to  the  public  is  a  reduction  in  the  prices 
of  goods.  That  is  the  one  specific,  particular 
point  at  which  the  public  ought  to  be  benefited. 
When,  therefore,  it  becomes  notorious  and  well 
demonstrated  that  the  protected  manufacturers 
are  not  selling  goods  to  their  fellow  countrymen 
as  low  as  they  sell  to  distant  and  unknown  for- 


COUNTRYMEN  SACRIFICED         6S 

eigners,  then  there  arises  a  public  clamor  against 
the  protected  interests  that  the  taxed  people  of 
the  United  States  are  sacrificed  for  the  benefit  of 
the  untaxed  people  of  foreign  countries.  This 
clamor  is  natural.  It  is  inevitable.  At  first 
sight  it  seems  reasonable.  To  the  average  citi- 
zen who  has  not  heard  the  excuses  of  the  pro- 
tected interests,  or,  having  heard,  is  unconvinced, 
it  seems  very  mean  that  a  United  States  manu- 
facturer should  spend  money  for  campaign  con- 
tributions to  the  republican  party,  should  pay 
fat  fees  to  the  lobbyists  at  Congress,  and  should 
put  taxes  on  his  own  friends  and  neighbors  under 
the  pretense  that  allowing  him  to  do  so  would  be 
for  their  direct  and  perceptible  pecuniary  ad- 
vantage, and  then,  when  he  had  the  power  and 
the  opportunity,  he  should  make  lower  prices  to 
people  he  never  knew  and  should  refuse  to  lower 
them  to  friends  and  neighbors  at  home. 

This  is  a  maddening  proposition  to  the  people 
of  the  United  States.  What  makes  the  case 
worse  is  that  the  practice  of  underselling  to  for- 
eigners is  concealed  as  far  as  possible.  When 
the  fact  of  such  sale  is  established,  the  proof  is 
resisted  in  every  way.  When  the  fact  must  be 
finally  conceded,  then  the  excuse  is  offered  that 
the  policy  of  foreign  underselling  is  the  only  one 
possible  whereby  business  can  be  done  at  home. 
It  is  only  the  excess,  it  is  excusingly  said,  which 
is  sold  abroad ;  if  it  were  not  for  the  profit  made 
on  that  the  factory  would  have  to  be  closed  and 


54     THE  PASSING  OF  THE  TARIFF 

then  the  United  States  people  would  be  at  the 
mercy  of  the  monopolistic  foreign  manufacturer. 
But  still  the  public  cannot  see  why,  as  a  matter 
of  mathematics,  the  expense  of  putting  the  goods 
on  the  retail  counter  cannot  be  made  everywhere 
uniform,  with  due  regard  to  cost  of  transporta- 
tion and  other  necessary  charges,  and  no  discrim- 
ination be  made  against  those  who  are  nearest 
and  are  taxed  for  the  benefit  of  those  who  are 
remote  and  are  untaxed.  On  the  face  of  it,  the 
explanation  does  not  explain.  The  public  re- 
plies :  "  Your  total  outlay  is  so  much.  To 
cover  that,  plus  a  fair  dividend,  your  income  must 
be  so  much.  A  uniform  retail  price,  at  such  a 
figure,  will  yield  that  income.  Why  is  not  that 
retail  price  uniform  ?  " 

A  pertinent  and  timely  illustration  of  the  ef- 
fect upon  the  popular,  unfavored,  public  mind 
by  the  operation  of  the  tariff  for  the  benefit  of 
foreigners  at  the  expense  of  our  citizens  is  seen 
in  the  adoption  of  the  following  resolutions  by 
the  National  Grange: 

Whereas,  For  the  protection  of  our  American 
manufacturers  it  has  been  deemed  necessary  to  place 
a  tariff  upon  various  articles  of  import,  and 

Whereas,  The  tariff  upon  many  articles  has  re- 
sulted in  the  building  up  of  gigantic  monopolies,  by 
stifling  foreign  competition  and  enabling  large 
American  manufacturers  to  sell  their  goods  cheaper 
in  foreign  countries  than  at  home,  at  the  expenses 


COUNTRYMEN  SACRIFICED  55 

of  American  agriculture  and  many  lesser  industries. 
Therefore,  be  it 

Resolved,  By  the  National  Grange  in  Hartford, 
Connecticut,  assembled  November  13,  1907,  that  we 
believe  that  the  general  welfare  of  the  country  de- 
mands an  exhaustive  and  thorough  tariff  revision, 
and  that  the  tariff  be  removed  from  every  article  that 
is  being  sold  in  foreign  markets  cheaper  than  at 
home. 

Resolved,  That  we  urge  upon  the  members  of  the 
Grange  throughout  the  United  States  to  take  speedy 
action  and  to  use  every  influence  at  their  command 
to  secure  the  carrying  out  of  the  sentiments  of  these 
resolutions. 

This  issue  is  one  of  the  new  ones  in  the  tariff 
agitation.  It  has  been  brewing  for  a  long  time, 
but  has  only  recently  become  acute.  As  long  ago 
as  1886,  when  Oliver  Ames,  the  shovel  manufac- 
turer of  North  Easton,  was  running  in  the  cam- 
paign which  landed  him  in  the  governor's  chair 
of  Massachusetts,  or  in  a  campaign  nearly  as  far 
back,  it  was  brought  out  by  the  opposition  that 
the  Ames  shovels  were  sold  at  one  price  on  the 
bank  of  the  Rio  Grande  in  Texas  and  for  a  lower 
price  just  across  the  river  in  Mexico.  An  at- 
tempt was  made  to  influence  votes  by  exposing 
this  practice  of  selling  home-made  goods  to  for- 
eigners, because  they  were  foreigners,  at  a  lower 
price  than  to  people  at  home  because  they  were 
citizens  of  tlie  United  States,  under  its  tariff 
laws,    and    unable    to    protect    themselves.     But 


56     THE  PASSING  OF  THE  TARIFF 

nothing  ever  came  of  the  attempt,  and  now  the 
poHcy  of  underselling  to  foreigners  has  become 
a  recognized  practice  on  the  part  of  the  protected 
manufacturers  of  the  United  States,  secret,  if 
possible,  but  followed  constantly,  whether  secret 
or  open. 

In  some  instances  tliis  underselling  to  foreign- 
ers results  in  serious  discrimination  against  the 
customers  in  the  United  States.  For  instance, 
when  the  steel  trust  sells  abroad  at  a  price  mate- 
rially less  than  it  does  to  its  customers  in  the 
United  States,  it  gives  just  so  much  advantage 
to  foreign  manufacturers  of  articles  in  whose 
making  steel  and  Iron  enter  as  raw  materials 
whereby  the  foreigner  is  enabled  to  undersell  the 
manufacturer  in  the  United  States.  In  general, 
articles  which  are  used  as  raw  materials  in  manu- 
factures which  are  made  abroad  in  competition 
with  our  manufactures,  when  sold  abroad  for  less 
than  the  price  here,  enable  foreign  manufacturers 
to  bear  hard  upon  our  manufacturers  and  tend 
to  drive  them  out  of  business.  This  is  a  phase 
of  the  tariff  situation  today. 

Two  lines  of  consequences  may  be  reasonably 
predicted  from  the  new  conditions.  The  first  is 
that  relating  ta  the  United  States  and  to  national 
politics.  In  making  any  forecast,  however,  it 
must  be  remembered  that,  practically,  the  forces 
in  operation  are  numerous,  complex  and,  In  part, 
at  least,  obscure.  Premises  may  not  be  followed 
by    apparently    logical    conclusions    because   the 


COUNTRYMEN  SACRIFICED         57 

activity  of  other  forces  changes  the  result. 
Within  the  United  States  the  effect  upon  na^ 
tional  politics  of  selling  to  foreigners  at  a  less 
price  than  to  the  people  of  our  own  country 
seems  sure  to  be  positively  adverse  to  the  tariff 
system.  This  is  so,  for  one  reason,  because  the 
protected  manufacturers  make  such  an  apolo- 
getic defense.  They  assume  such  an  attitude  as 
to  make  the  people  suspicious  that  the  charge  is 
true,  for  they  seek  either  to  cover  up  or  to  ex- 
cuse their  deeds.  On  the  face  of  it,  they  realize 
that  it  is  a  bad  case  for  them.  Their  own  com- 
mon sense  takes  the  same  ground  as  the  common 
sense  of  the  unprotected  purchasers  of  their 
goods,  and  they  know  that  unless  they  can  ex- 
plain away  the  surface  aspect  of  the  situation, 
the  tariff  will  be  knocked  to  pieces  and  they  will 
be  left  to  conduct  their  business  upon  its  merits 
without  the  backing  of  the  government  in  put- 
ting a  tax  upon  the  goods  which  are  Imported  in 
competition  with  theirs. 

This  initial  attitude  of  secrecy,  apology  and 
excuse  on  the  part  of  the  manufacturers  when 
they  are  first  held  up  to  the  wrath  of  the  public 
goes  to  confirm  the  current  belief  that  here  is  a 
way  of  doing  business  which  does  not  give  fair 
play  to  the  people  of  the  United  States.  Hence 
here  is  operative  a  force,  wholly  independent  of 
the  fundamental  principles  of  international 
trade,  which  makes  for  the  overthrow  of  the  pres- 
ent tariff  conditions.     It  is  not  a  scientific  argu- 


58      THE  PASSING  OF  THE  TARIFF 

ment.  It  Is  only  a  protest  based  upon  universal 
human  nature.  It  Is  a  demand  for  fair  treat- 
ment. It  Is  an  assertion  of  equality  for  home 
purchasers  with  foreigners.  It  does  not  Involve 
the  least  hostility  to  foreigners.  Still  less  does 
It  demand  that  our  manufacturers  shall  discrim- 
inate against  them  and  In  favor  of  the  people  of 
the  United  States,  though  such  a  demand  might 
be  made  plausibly  and  reasonably  in  view  of  the 
fact  that  only  by  taxes  upon  the  people  of  the 
United  States  are  the  manufacturers  able  to  do 
business  at  all,  If  their  own  estimate  of  the  Im- 
perative necessity  of  tariff  protection  be  accepted 
as  correct.  It  Is  only  a  protesting,  resentful  de- 
mand for  plain,  decent  treatment,  as  good  as  for- 
eigners get,  and  no  better.  If  it  Is  not  given, 
it  will  go  hard  with  the  tariff. 

In  the  second  place,  this  practice  of  undersell- 
ing to  foreigners  has  consequences  for  interna- 
tional trade.  Here  is  a  bearing  even  more  im- 
portant than  its  weiglity  effect  upon  the  political 
situation  at  home  because  this  extension  of  trade 
may  prove  historically  to  have  been  the  opening 
of  an  era  and  the  inauguration  of  methods  which 
will  logically  and  inevitably  result  In  the  complete 
destruction  of  the  tariff  wall  and  in  the  formal 
abandonment  by  the  nation  of  the  entire  system 
of  supposed  protection  to  industries  in  the  United 
States. 

Let  the  affirmation  be  made  here  that  it  has 
not  yet  been  demonstrated  that  It  is  necessary  for 


COUNTRYMEN  SACRIFICED         59 

United  States  manufacturers  to  sell  to  foreign- 
ers more  cheaply  than  to  the  people  of  the  United 
States  in  order  to  build  up  foreign  markets  for 
their  goods.  Manufacturers  seem  to  have  as- 
sumed that  it  was  good  policy  to  put  prices  low 
in  order  to  catch  custom,  trusting  to  their  power 
over  republican  legislators  by  campaign  contri- 
butions and  by  the  Washington  lobby  to  main- 
tain the  tariff  and  the  existing  prices  at  home. 
Doubtless  this  has  been  good  policy,  if  they  are 
willing  to  take  the  risk  of  the  wrath  of  the  peo- 
ple and  the  loss  of  tariff  shelter.  At  any  rate, 
they  are  to  be  credited  with  shrewd  sense  in  build- 
ing up  foreign  markets. 

Now  this  second  branch  of  the  subject  subdi- 
vides itself  into  two  —  the  home  effect  and  the 
foreign,  saying  nothing  further  about  the  un- 
derselling to  foreigners,  but  going  on  to  see  what 
will  be  the  logical  outcome  of  the  foreign  trade 
based  upon  the  underselling.  United  States 
goods,  let  it  be  conceded,  as  a  consequence  of 
the  underselling,  have  captured  markets  in  all 
parts  of  the  world.  Foreigners  want  our  goods 
because  they  can  be  produced  and  delivered 
abroad  cheaper  than  the  natives  can  make  goods 
which  will  supply  the  same  needs.  Tastes  have 
been  developed,  wants  have  been  created,  fashions 
have  been  set,  which  were  unknown  before  the  ad- 
vent of  goods  from  this  country.  Constant  de- 
mand exists.  But  purchasing  power  is  limited. 
Natives  of  these  countries  say :    "  We  would  like 


60     THE  PASSING  OF  THE  TARIFF 

to  take  many  more  of  your  goods,  but  we  have 
not  the  wherewith  to  buy.  We  are  not  rich  like 
you.  Nature  has  blessed  us  with  certain  ad- 
vantages, but  our  capital  to  develop  them  is  lim- 
ited. Besides,  if  we  have  anything  which  we  can 
produce  profitably,  but  which  anybody  in  your 
country  desires  to  produce  also,  even  though  it 
cost  much  more  than  it  would  to  buy  of  us,  he 
bestirs  himself  to  have  a  tax  put  upon  your  own 
people  and  a  wall  set  up  against  the  importation 
of  our  product.  We  cannot  raise  money  where- 
with to  buy  your  goods.  Therefore  we  cannot 
trade  with  you,  much  as  we  should  like  to  do  so. 
If  you  will  take  down  your  tariff  wall,  so  that 
we  can  sell  to  your  people  at  a  profit,  then  they 
will  get  our  products  cheaper  than  their  home- 
made goods  of  the  same  sort,  and  you  will  have  a 
larger  market  for  your  manufactures  of  the  sort 
which  we  can  buy  of  you  cheaper  than  we  can 
produce  ourselves." 

In  the  United  States,  therefore,  the  effect  of 
this  extension  of  foreign  trade  will  be  to  cause  a 
change  of  view  on  the  part  of  the  manufacturers 
themselves.  Those  manufacturers  who  trade  with 
foreign  countries  and  who  foresee  the  develop- 
ment of  the  foreign  market  to  make  up  for  pos- 
sible shrinkage  of  the  home  market  will  soften  the 
asperities  of  their  tariff  principles  and  will  cast 
about  them  for  such  a  change  in  the  percentage 
of  duties  as  will  enlarge  their  foreign  market 
by  increasing  the  purchasing  power  of  their  for- 


COUNTRYMEN  SACRIFICED         61 

eign  customers.  In  this  way  the  protectionist 
camp  will  be  divided  in  itself,  and  this  is  the  very 
process  which  is  actually  going  on  today  before 
the  eyes  of  the  country  in  consequence  of  the 
changed  relations  caused  by  the  partial  opening 
of  foreign  markets  to  United  States  goods.  In 
all  this  process  the  dollar  is  the  only  argument. 
Patriotism,  fair  play  for  the  people  of  the  United 
States,  fair  play  for  foreigners,  the  spread  of 
democratic  institutions,  or  salvation  through  the 
gospel,  are  as  inoperative  forces  in  this  revolu- 
tion of  the  tariff  situation  as  the  precession  of 
the  equinoxes.  The  dollar  does  it  all,  and  does 
it  well. 

The  second  part  of  the  second  branch  of  the 
consideration  of  tariff  conditions  based  on  un- 
derselling to  foreigners  relates  to  the  effect 
abroad.  These  effects  are  complementary  to 
those  just  referred  to  as  produced  at  home,  and 
these  two  sides,  taken  together,  constitute  an  in- 
ternational status  out  of  which  may  come  the 
final  solution  of  the  entire  tariff  problem.  In 
this  respect,  therefore,  the  era  of  underselling 
promises  to  be  of  large  historical  consequence. 
This  final  solution  which  is  foreshadowed  by  the 
present  situation  is  the  complete,  definite  and  of- 
ficial abandonment  of  the  tariff  system  on  the  part 
of  the  people  of  the  United  States.  For  the 
comfort  of  those  who  hold  firmly  that  it  is  a 
money-making  policy  for  the  people  to  tax  them- 
selves to  support  an  infant  industry  until  it  is 


62      THE  PASSING  OF  THE  TARIFF 

able  to  walk  alone,  it  may  be  interjected  here  that 
the  course  would  remain  open  of  protecting  the 
infants  by  direct  cash  allowances,  or  by  other 
equivalent  devices.  But  that  international  trade 
can  be  permanently  crippled  and  the  creation  of 
vast  wealth  be  persistently  prevented  bj-  obstruc- 
tions when  both  sides  demand  their  removal, 
seems  to  be  impossible.  The  direct  consequence 
of  the  extension  of  trade  between  nations,  judg- 
ing by  the  effect  upon  the  manufacturers  of  our 
own  country,  will  be  to  produce  on  both  sides  a 
demand  for  the  removal  of  all  possible  obstacles 
in  order  that  trade  may  be  as  large  as  possible. 
With  such  public  sentiment  on  each  side,  it  is  in- 
evitable that  such  an  artificial  and  easily  remov- 
able barrier  as  the  tariff  —  in  our  country  and 
other  countries  also  —  should  be  removed  wholly 
out  of  sight. 

We  are  having  today  practical  illustrations 
of  the  mind-opening  effect  of  the  world  extension 
of  trade  on  the  part  of  the  manufacturers  of  the 
United  States.  This  is  due,  in  part,  at  least, 
to  their  efforts  to  capture  foreign  markets.  On 
both  sides  of  the  ocean  the  manufacturers  and 
merchants  are  coming  to  see  the  mutual  advan- 
tage of  a  larger  exchange  of  products.  More 
than  this,  it  is  not  only  a  mere  personal  profit  to 
the  parties  directly  interested,  but  a  larger  mar- 
ket and  more  profit  to  the  nations  as  a  whole. 
Already  these  new  conditions  are  operative  in  the 
United  States  and  foreign  countries,  and  a  new 


COUNTRYMEN  SACRIFICED        63 

era  of  international  trade  has  evidently  begun. 
World  conditions  are  being  established  on  a 
new  basis.  What  is  true  of  any  two  nations  in 
their  relations  to  each  other,  as  far  as  unrestricted 
trade  is  concerned,  is  equally  true  of  each  in  its 
relations  to  each  of  the  others.  In  other  words, 
present  trade  tendencies  open  the  minds  of  all 
nations  to  more  liberal  policies.  Perhaps  the 
United  States  will  take  the  lead.  In  any  event, 
the  underselling  by  United  States  manufactur- 
ers to  foreign  purchasers  has  in  it  prodigious  con- 
sequences for  the  tariff  system,  and  men  of  lib- 
eral views  can  contemplate  the  outcome  with  deep 
satisfaction,  foreseeing  the  end  of  the  tariff  of 
obstruction. 


CHAPTER  V 

OBSTRUCTION'S   CHALLENGE  TO 
SCIENCE 

Protectionists  object  to  the  teachings  of  the 
colleges  in  favor  of  free  trade  and  say  that  po- 
litical economy  is  not  an  exact  science.  Truly, 
here  is  a  marvel.  Here  is  affinned  to  be  a  field 
where  there  is  an  exception  to  the  general  tinith 
that  law  works  at  every  point  of  space,  at  every 
moment  of  time.  It  is  declared  that  here  is  an  aim- 
less and  resultless  groping  around  of  forces 
without  orderly  procedure,  regardless  of  the  uni- 
form sequence  of  cause  and  effect  which  is  found 
elsewhere  in  the  laws  of  matter  and  of  mind  with- 
out exception. 

But  suppose  that  the  denial  of  exactitude  to 
this  science  be  qualified  by  saying  that  it  is  not 
now  an  exact  science,  but  will  become  such  when 
men  discover  its  laws.  At  present  the  denial  is 
based  upon  the  ability  of  the  opposing  sides  to 
enumerate  many  alleged  facts  to  contradict  the 
enunciation  of  law  by  the  other  side.  But  that 
does  not  make  against  the  validity  of  an  exact 
science.  Science  is  knowledge  of  law.  Facts, 
by  themselves,  are  no  more  science  than  a  pas- 
tureful  of  stones  is  a  stone  wall.  No  aggrega- 
tion of  facts,  with  nothing  but  facts,  can  make 
any  approach  to  being  a  science.     No  science  is 

64< 


OBSTRUCTION'S  CHALLENGE       65 

dependent  for  its  existence  upon  the  facts  which 
illustrate  its  laws,  but  the  facts  must  conform 
to  the  laws  as  helplessly  as  a  car  must  go  when 
a  locomotive  pulls  it.  Some  sort  of  law  must 
be  back  of  every  fact  which  ever  existed,  or  ever 
will  exist,  and  knoAvledge  of  the  law  which  pro- 
duced the  fact  will  be  science. 

Ability  to  produce  many  facts  which  seem  to 
contradict  an  affirmation  of  law  is  no  certain 
proof  that  the  law  does  not  exist.  It  is  easy 
to  array  many  facts  to  show  that  the  law  of  mat- 
ter which  is  manifest  in  gravitation  does  not  ex- 
ist. In  addition  to  the  events  of  everyday  life 
which  every  observer  notices,  such  as  the  ascent 
of  smoke  and  vapor  and  all  sorts  of  particles 
floating  in  the  air,  more  marked  disproof  can 
be  found.  For  instance,  it  is  an  observed  fact 
that  when  the  crust  of  the  earth  cracks  open  and 
a  fair  chance  is  afforded  for  hot  stones  and  rocks 
below  they  fly  up  with  great  force.  Therefore 
it  is  a  law  of  nature  that  hot  rocks  and  stones 
from  the  bowels  of  the  earth  fly  upward,  thus 
disproving  the  law  of  gravitation.  Of  course 
the  argument  is  not  complete  until  it  is  learned 
whether  the  rocks  and  stones  ever  come  down.  In 
the  same  way,  it  is  inconceivable  that  there  should 
be  a  fact  in  the  field  of  political  economy  whose 
law  of  being  contradicts  any  other  law  whose  ex- 
istence has  been  conclusively  demonstrated.  It 
may  be  that  political  economy,  as  a  science,  in  its 
present  development,  cannot  explain  all  the  facts 


66      THE  PASSING  OF  THE  TARIFF 

in  its  field,  just  as  there  are  facts  in  physics  whose 
law  of  being  is  not  yet  fully  comprehended.  But 
to  affirm  that  therefore  the  field  of  political  econ- 
omy is  inherently  and  hopelessly  unscientific,  a 
chaos  and  abyss  for  the  reason  of  man,  is  as 
unreasonable  and  as  unscientific  as  to  affirm  that 
there  are  no  laws  of  physics  because  some  facts 
have  not  been  classified  under  their  law  of  be- 
ing- 
Facts  are  dead  things  which  lie  helplessly  where 
they  are  put.  The  living  mind  sees  in  them  illus- 
trations of  forces  once  active  which  made  them 
what  they  are.  Those  forces  were  the  princi- 
ples or  laws  which  were  in  existence  before  the 
facts  and  which  will  continue  equally  operative 
after  they  have  made  the  facts,  for  an  indefinite 
future,  as  long  as  the  earth  shall  exist.  The  liv- 
ing mind,  brooding  over  those  facts,  endeavors 
to  find  in  them  the  explanation  of  what  made 
them,  and  it  will  not  be  content  till  it  has  ac- 
counted fully  for  them. 

Obstructionists,  therefore,  who  approve  inter- 
ference with  freedom  of  trade,  when  they  deny 
that  there  is  an  exact  science  of  political  economy 
and  yet  affirm  the  validity  of  the  principles  which 
they  profess,  merely  proclaim  that  the  laws  as 
the  other  side  sees  them  are  not  laws  at  all,  but 
that  their  own  so-called  laws  are  the  real  and 
adequate  laws  to  explain  the  facts.  Contradict- 
ing themselves,  therefore,  when  they  deny  the 
existence  of  a  science  of  political  economy,  they 


OBSTRUCTION'S  CHALLENGE       67 

affirm  that  there  is  such  a  science  and  that  they 
alone,  of  all  men,  know  its  laws. 

It  being  impossible,  in  the  nature  of  the  case, 
therefore,  to  avoid  the  affirmation  that  there  is 
a  science  of  political  economy,  and  the  dispute 
really  turning  upon  the  question  which  side  has 
the  correct  understanding  of  the  laws,  the  end  of 
the  dispute  can  be  established  to  the  mind  of  the 
world  only  by  such  a  setting  forth  of  the  princi- 
ples, or  laws,  as  shall  so  accord  with  the  common 
judgment  regarding  the  natural  order  of  things, 
(because  there  must  be  harmony  of  all  laws  which 
the  reason  of  men  can  comprehend)  as  to  make 
one  side  or  the  other  seem  contradictory  and  ab- 
surd. Doubtless  the  largest  array  of  facts  which 
are  explained  by  the  theories  which  are  now  in 
contradiction  will  influence  the  mind  of  the  world 
in  accepting  a  conclusion,  but  the  facts  alone 
cannot  lead  to  a  decision.  Reason,  on  higher 
grounds,  must  be  the  final  arbiter.  The  battle 
of  facts  has  raged  furiously  many  scores  of 
years  without  silencing  either  side.  It  might 
rage  with  equal  fury  and  bitterness  to  the  end  of 
time.     Facts   cannot   convince.     Principles   can. 

Now,  the  laws  of  trade  are  laws  of  mind.  They 
are  not  laws  of  matter.  When  it  is  stated,  as  a 
law  of  gravitation,  that  it  acts  directly  as  the 
mass  and  inversely  as  the  square  of  the  distance, 
matter  alone  determines  the  direction  and  quantity 
of  the  force  which  is  exerted.  But  when  it  is 
stated,  as  a  law  of  currency,  that  a  bad  coinage 


68     THE  PASSING  OF  THE  TARIFF 

tends  to  drive  out  a  good  coinage,  the  law  does 
not  inhere  in  the  metal,  but  it  is  in  the  human 
mind.  That  law  may  be  propounded  in  these 
words :  "  IVIen  get  as  much  as  possible  for  as 
little  as  possible,"  or,  "  the  attraction  of  wealth 
upon  the  human  mind  varies  directly  as  its  quan- 
tity, the  conditions  of  attainment  being  equal." 
That  is,  men  make  as  good  bargains  as  possible. 
That  is  good  common  sense.  The  standard  of 
the  good  and  bad  coinage  being  nominally  the 
same,  men  will  give  an  inferior  coin  for  an  arti- 
cle priced  by  it,  and  keep  the  good.  It  Is  a  men- 
tal operation  and  the  law  is  absolutely  and  justly 
operative  when  it  has  the  field  to  itself.  It  is  a 
law  which  Is  at  the  basis  of  all  activity  for  a  live- 
lihood. It  Inspires  all  Inventions.  It  compels 
all  transportation  of  pi'oducts.  It  is  the  life  of 
trade,  and  without  it  trade  would  be  chaos.  Un- 
regulated by  regard  for  the  rights  of  others,  it 
results  In  frauds,  robberies  and  murders.  It  is 
affirmed  by  reason,  which  Is  law  in  mind,  which 
Is  law  of  God.  Reason  says  that  It  is  wise  to  get 
as  large  returns  for  effort  as  possible  and  that 
any  other  course  Is  folly. 

Trade  has  only  one  object  —  by  exchange  of 
articles  to  get  more  value  in  one's  possession  than 
he  has  before  trading.  Transfer  of  goods  in  the 
direction  of  the  consumer  Is  what  Is  meant  by 
trade  in  this  connection,  not  a  mere  speculative 
swapping  of  property.  There  may  be  direct 
barter ;  there  may  be  a  common  measure  of  value 


OBSTRUCTION'S  CHALLENGE      69 

by  the  use  of  money.  But  the  essence  of  the 
matter  is  the  exchange  whereby  the  consumable 
article  goes  on  its  way  to  the  consumer.  In  the 
possession  of  each  party  to  every  reasonable 
trade  the  article  traded  for  is  worth  more  than 
the  article  originally  in  possession.  Real  wealth 
is  created  by  trade.  That  is,  the  distribution  of 
products,  bringing  them  nearer  to  the  consumer, 
adds  to  their  real  value.  That  seems  simple  and 
fundamental  beyond  dispute. 

To  add  a  corollary  of  this  position,  it  follows 
that  if  a  trader  takes  an  article  where  it  has  the 
least  value  and  distributes  it  where  it  has  the 
most  value,  he  will  make  the  most  profit  for  him- 
self and  will  add  most  to  the  wealth  of  the  world. 
That  seems  to  be  simple  mathematics.  That  is 
the  substance  of  the  proposition  at  the  root  of 
the  protest  against  obstruction  of  trade.  It 
is  familiar,  and  is  brought  out  here  only  to  em- 
phasize how  the  contrary  doctrine  puts  trammels 
on  trade  all  over  the  world  and  prevents  the  de- 
velopment of  wealth  in  every  quarter  which  has 
cheaply  produced  goods  to  sell  or  has  imperative 
needs  to  be  supplied.  Such  trade  is  precisely  in 
accord  with  the  general  principle  of  common 
sense  that  the  most  net  gain  is  to  be  made  by 
giving  as  little  as  possible  for  as  much  as  possi- 
ble. 

But  when  traders  undertake  to  act  upon  that 
universal  principle  all  over  the  world,  the  ob- 
structionists come  forward  and  say  that  if  this 


70     THE  PASSING  OF  THE  TARIFF 

trade  is  prevented  they  will  show  a  way  to  make 
still  more  profit.  That  is  the  issue  which  ob- 
struction throws  down  before  science  based  upon 
the  law  of  trade,  which  is  a  law  of  mind. 

Right  at  this  point  the  battle  of  facts  begins. 
Having  secured  governmental  action  and  put  ob- 
structions in  the  way  of  trade,  the  issue  for  all 
subsequent  time  is  whether  the  policy  has  suc- 
ceeded to  the  extent  of  making  more  property  for 
the  country  than  would  have  been  made  without 
the  obstructions.  Obstructionists  point  to  the 
property  created  under  the  obstruction  law  and 
claim  credit  for  their  policy  accordingly.  Those 
who  oppose  obstruction  point  out  that  certain 
industries  have  been  destroyed  by  the  imposition 
of  burdens  upon  them  under  the  obstruction 
policy ;  they  point  to  the  accumulation  of  wealth 
by  the  favored  few ;  they  show  that  special  privi- 
leges are  enjoyed  at  the  expense  of  the  many. 
Fact  is  arrayed  against  fact.  Such  a  contest 
can  never  reach  a  conclusive  determination,  for 
reliance  is  upon  facts  alone.  It  is  only  when 
the  sunlight  of  principles  illumines  the  facts  that 
the  mind  is  convinced,  and  that  illumination 
comes  through  the  mists  of  personal  interest, 
prejudice,  avarice,  envy,  passion  and  of  partisan 
politics  till  it  is  evident  that  a  clear  understand- 
ing of  principles  will  never  be  attained.  Clouds 
of  personal  motive  will  affect  the  action  of  the 
people,    and    may    detennine    their    voting,    but 


OBSTRUCTION'S  CHALLENGE       71 

principles  will  doubtless  be  found  the  decisive  fac- 
tor in  the  dispute. 

What  shall  decide  between  obstruction  and  sci- 
ence, then,  is  the  question  in  this  protracted  bat- 
tle of  the  facts  regarding  the  tariff?  Some  law 
superior  to  the  facts  must  be  discovered  whose 
demonstration  will  make  counter  claims  ridiculous 
to  the  fair  minded.  That  is  the  status  of  the 
controversy  today,  with  obstructionists  asserting 
that  the  scientific  attainments  of  reason,  as  illus- 
trated by  college  teachings,  are  absolutely  at 
fault. 

Now,  to  turn  back  in  order  to  carry  out  the 
thought  proposed  above,  let  it  be  noted  that  the 
science  of  a  particular  field  of  activity  is  the 
knowledge  of  the  law  in  general  which  is  supreme 
in  that  field,  and  of  its  laws  in  particular.  Let 
it  be  understood  more  clearly  in  detail  that  the 
laws  of  trade  are  laws  of  mind.  Take  the  law 
of  supply  and  demand,  for  instance.  There  is 
no  law  of  the  vegetable  world  which  makes  pota- 
toes grow  when  men  want  to  eat  them,  or  to  spec- 
ulate in  them.  There  is  no  law  of  chemistry  or 
mechanics  which  brings  ores  from  the  earth  to  the 
top  of  the  ground  when  men  are  in  straits  for 
them.  No  law  of  nature  bears  upon  trade  oth- 
erwise than  by  action  through  the  human  mind. 
In  the  strict  sense  of  the  term  there  is  no  science 
of  wealth  —  a  term  which  has  had  wide  currency 
and  is  sometimes  given  as  a  definition  of  political 


72     THE  PASSING  OF  THE  TARIFF 

economy.  The  real  thing  Avhich  is  the  subject 
of  the  science  is  the  attractive  power  of  goods 
upon  tlie  human  mind.  If  the  blind  and  awk- 
ward temi  of  "  political  economy  "  is  dear  to 
many  thinkers,  let  the  definition  stand  in  these 
words :  "  Political  economy  is  the  science  of  the 
attractive  power  of  goods  upon  the  human 
mind." 

"  Goods  "  in  the  definition  includes  everything 
for  which  man  will  give  property  or  money, 
whether  tangible  or  intangible,  for  men  give 
money  for  education,  for  religious  consolation  and 
for  purposes  at  the  other  extreme,  and  the  intang- 
ible talent  which  renders  the  service  has  its  mar- 
ket value  and  therefore  has  a  money  price  and 
is  a  factor  in  financial  transactions.  Whatever 
men  do  not  have,  but  want  and  will  give  some- 
thing for  comes  into  the  field  of  consideration, 
and  it  is  true  that  even  the  price  of  the  soul  of 
the  corrupt  public  official  who  sells  favors  for 
money,  in  violation  of  his  trust,  comes  within  the 
field  of  political  economy  in  its  widest  use. 

The  human  mind  operates  under  law.  Hu- 
man needs  are  caused  by  the  operation  of  law. 
It  is  no  more  a  conclusive  objection  to  the  exist- 
ence of  a  science  of  political  economy  that  free 
wills  are  concerned  and  that  the  facts  are  exceed- 
ingly complicated  than  it  is  a  conclusive  objec- 
tion to  any  science  of  physics  that  the  facts  about 
the  weather  are  exceedingly  complicated  and  that 
an  exact  science  of  the  weather  has  thus  far  been 


OBSTRUCTION'S  CHALLENGE       73 

utterly  impossible  for  the  human  mind  to  attain. 
In  both  the  realms  of  weather  and  of  political 
economy  there  is  no  confusion  whatever,  but  only 
extreme  complication,  beyond  even  the  imagina- 
tion of  men  to  conceive.  There  is  a  vast  differ- 
ence between  confusion  and  complication.  In 
the  case  of  the  weather,  with  all  its  seeming  va- 
garies and  uncertainties,  there  is  the  absolute, 
precise  reign  of  physical  law  at  every  point  of 
space  at  every  moment  of  time.  There  is  the 
widest  possible  field  for  an  exact  science,  and 
the  failure  to  attain  it  by  no  means  disproves 
the  supremacy  of  physical  laws.  In  a  similar 
way  there  is  law  in  the  human  mind  whenever  it 
makes  an  effort,  through  exertion  of  the  body  or 
otherwise,  to  obtain  goods.  Law  in  the  mind  is 
converted  into  action  by  the  will,  but  the  attrac- 
tive power  of  the  goods,  offset  by  the  difficulty 
and  cost  of  getting  them,  makes  a  reign  of  law 
which  is  decisive  of  the  resulting  facts  in  every 
presentation  of  goods  to  the  mind. 

This  definition  of  what  political  economy  is 
does  not  suffer  from  the  fact  that  the  physical  ex- 
istence of  quantities  of  goods  is  a  factor  in  the 
conditions  of  trade  and  of  human  activity  to  get 
goods.  Of  course  the  products  of  human  hands 
enter  into  the  case,  and  physical  effects  produce 
mental  consequences,  but  none  the  less  are  the 
laws  of  trade  laws  of  mind.  Supply  and  demand, 
the  rate  of  exchange,  prices  of  goods,  rates  of 
wages,  the  relations  of  good  and  bad  currency, 


74     THE  PASSING  OF  THE  TARIFF 

the  apprehension  of  poor  crops,  fear  of  war,  the 
disturbance  of  elections,  the  fashions,  public  prej- 
udice, the  rate  of  interest,  or  any  other  consid- 
eration whatsoever,  analyzed  to  its  essence,  is  a 
mental  activity  or  state  and  the  science  of  politi- 
cal economy  must  deal  with  the  laws  of  mind  and 
with  the  conditions  which  produce  mental  action. 

Now,  as  far  as  there  are  claims  to  a  scientific 
basis  for  activities  in  this  field,  it  is  a  general 
truth  that  the  teaching  in  the  colleges  and  uni- 
versities is  that  obstiniction  of  trade  is  a  bad  pol- 
icy, tending  to  check  the  prosperity  of  the  people 
in  whose  way  the  obstruction  is  put.  Whatever 
exceptions  exist  to  this  general  fact  only  empha- 
size the  almost  universal  testimony  of  this  science 
as  far  as  it  is  a  science,  that  any  policy  of  trade 
which  obstructs  the  free  exchange  of  products 
tends  to  diminish  the  wealth  which  otherwise 
exists. 

Let  the  further  point  be  made,  in  order  to  run 
this  truth  down  to  its  simplest  form,  that  science 
differs  from  other  forms  of  knowledge  only  in 
being  more  thorough,  more  accurate  and  more 
classified.  But  it  is  just  the  same  sort  of  knowl- 
edge in  kind.  A  man  who  is  a  scientist  in  medi- 
cine cannot  be  a  scientist  in  metals,  stars  or  earth- 
quakes, because  he  has  not  time  enough  to  be 
thorough  and  accurate  in  all  fields.  But  his 
knowledge  in  the  unfamiliar  fields,  as  far  as  it 
goes,  is  of  the  same  sort  as  his  knowledge  in  his 


OBSTRUCTION'S  CHALLENGE      75 

particular  field.  That  is,  science,  in  essence,  is 
just  the  same  as  common  sense. 

Now  we  see  more  clearly  the  bearing  of  science 
upon  the  obstruction  theory  of  trade.  Profes- 
sional science,  in  this  case,  is  supported  by  the 
universal  common  sense  of  all  the  world,  that  it 
makes  an  object  more  difficult  to  get  if  an  ob- 
struction is  put  in  the  way  of  getting  it.  On 
the  face  of  it,  therefore,  not  only  does  the  ob- 
struction theory  fly  in  the  face  of  so-called  sci- 
ence, but  it  is  an  affront  to  common  sense  also, 
and  it  would  seem  as  if,  when  it  is  submitted  to 
the  common  sense  of  the  voters,  it  would  be 
promptly  rejected  as  too  absurd  for  a  moment's 
consideration. 

What,  then,  is  the  reason  why  it  is  not  so  re- 
jected .f*  From  the  history  of  the  obstruction  pol- 
icy and  of  the  campaigns  which  have  been  fought 
over  it,  no  other  explanation  so  well  accords  with 
the  facts  as  that  the  obstruction  theory  makes 
a  most  plausible  promise  to  the  people,  and  the 
people  believe  it.  This  theory  does  not  dare  to 
stand  up  and  squarely  deny  that  putting  obstruc- 
tions around  an  object  makes  it  harder  to  get, 
but  it  says :  "  Give  me  a  chance  for  a  term  of 
years,  and  I  will  develop  such  conditions,  if  the 
people  are  not  permitted  to  buy  elsewhere,  that 
I  can  give  them  goods  cheaper  than  they  can 
get  them  from  others."  That  is  the  ground 
upon  which  the  obstruction  theory  has  come  be- 
fore the  people  for  more  than  a  hundred  years 


76     THE  PASSING  OF  THE  TARIFF 

and  asked  them  to  give  it  trial  and  further  trial 
and  further  trial  still.  At  every  point  it  is  a 
promise,  an  unredeemed  promise,  and  nothing 
more.  For  it  has  never  reached  the  point  where 
it  is  willing  that  the  obstruction  shall  be  removed. 
Until  that  point  is  reached,  it  confesses  that  it 
has  not  been  able  to  establish  a  pennanent  condi- 
tion so  that  lower  prices  are  insured  in  the  coun- 
try which  has  suffered  from  the  obstruction,  in 
case  the  obstruction  is  removed.  Present-day 
obstructionists  demand  that  the  obstruction  be 
made  perpetual  and  so  they  confess  the  failure 
of  their  theory,  when  it  is  taken  at  its  real  value. 
No  doubt  being  possible,  to  the  common  sense 
of  the  nation,  as  to  the  effect  of  putting  obstruc- 
tions in  the  way  of  trade,  when  the  issue  is  pre- 
sented in  its  bald  form,  the  practical  question 
now  before  the  people  is  how  long  they  will  be 
satisfied  with  a  theory  which  rests  upon  a  promise 
and  a  promise  only,  a  promise  which  has  never 
been  fulfilled,  which  today  is  as  purely  promis- 
sory as  ever  and  which  offers  no  more  prospect 
than  it  did  a  hundred  years  ago  that  it  ever  will 
be  kept.  How  much  longer  will  the  common 
sense  of  the  nation  be  satisfied  with  unfulfilled 
promises?  The  promise  is  to  perfonn  a  feat 
which,  in  its  very  essence,  is  repugnant  to  com- 
mon sense.  Only  by  letting  their  common  sense 
be  imposed  upon  have  the  people  been  led  to  tol- 
erate the  obstruction  policy  at  alL     The  situa- 


OBSTRUCTION'S  CHALLENGE       77 

tion  has  now  reached  a  stage  where  some  of  the 
people  will  surely  say  that  forbearance  has  ceased 
to  be  a  virtue  and  that  it  is  high  time  for  com- 
mon sense  to  return  to  its  supremacy. 


CHAPTER  VI 
INJUSTICE    OF   THE    TARIFF 

We  build  our  tariff  discussion  on  the  princi- 
ples, deeper  than  human  constitutions  or  laws, 
which  are  set  in  the  light  by  the  Declaration  of 
Independence,  that :  "  all  men  are  created  equal ; 
that  they  are  endowed  b^^  their  Creator  with  cer- 
tain unalienable  rights ;  that  among  these  are 
life,  liberty,  and  the  pursuit  of  happiness." 

Article  I  of  the  "  Declaration  of  Rights  of  the 
Inhabitants  of  the  Commonwealth  of  ]\Iassachu- 
setts  "  says :  "  All  men  are  bom  free  and  equal, 
and  have  certain  natural,  essential,  and  unalien- 
able rights ;  among  which  may  be  reckoned  the 
right  of  enjoying  and  defending  their  lives  and 
liberties ;  that  of  acquiring,  possessing  and  pro- 
tecting property ;  in  fine,  that  of  seeking  and 
obtaining  their   safety   and  happiness." 

Necessarily,  government  in  a  democracy  must 
be  by  the  majority,  in  the  ultimate  analysis,  for 
that  a  minority  should  govern  a  majority  is  in- 
compatible with  the  theory  of  popular  govern- 
ment. One  principle  of  action  is  frequently  ex- 
pressed by  the  phrase  "  the  greatest  good  of  the 
greatest  number,"  which  may  be  nonsense  and 
surely  means  gross  injustice  as  some  seem  to  un- 
derstand it.  Though  a  majority  must  govern, 
and  though  the  welfare  of  the  people  as  a  whole 

78 


INJUSTICE  OF  THE  TARIFF       79 

must  be  the  aim,  yet  there  are  sacred  bounds 
which  even  the  sovereign  authority  of  the  people 
must  not  overstep.  Those  bounds  are  set  by 
the  principles  above  quoted.  Pretended  welfare 
of  the  whole  can  never  justify  the  oppression  of 
a  part.  Rights,  sacred  and  inviolable,  inhere  in 
every  person,  and  no  pretense  of  public  good  can 
destroy  them.  Neither  weak  persons,  nor  small 
communities,  nor  the  less  important  states  in  our 
Union,  can  be  sacrificed  rightfully  for  the  benefit 
of  the  stronger  and  wealthier.  In  every  person, 
every  community,  and  every  state,  however  pow- 
erless against  the  strength  of  the  mighty  major- 
ity, inheres  the  right  to  life,  liberty  and  property, 
as  set  forth  in  the  alphabets  of  our  liberties. 

It  is  true  that  the  Constitution  of  the  United 
States  permits  the  enforcement  of  tariff  laws. 
But  the  constitution  was  man-made,  and  however 
much  we  admire  it  for  its  general  fidelity  to  the 
principles  of  human  equality  and  to  the  sound 
policies  of  administration,  yet,  when  it  does  not 
rise  to  the  height  of  the  truths  and  rights  which 
inhere  in  the  very  nature  of  men,  then  the  con- 
stitution ought  to  be  changed.  Amendment 
must  be  made  where  the  constitution  fails  to  be 
true  to  human  rights,  as  revealed  by  the  brighter 
light  we  have  compared  with  the  light  which 
shone  for  the  framers  of  our  form  of  govern- 
ment. So  the  discussion  is  not  only  not  closed, 
but  is  not  really  affected  by  any  provision  of  the 
constitution. 


80      THE  PASSING  OF  THE  TARIFF 

In  tliis  particular  case  amendment  of  the  con- 
stitution is  not  necessary  for  reform,  for  the 
country  is  at  full  liberty,  at  any  time,  to  drop 
the  tariff  system  and  to  collect  its  revenue  by 
other  means.  The  sole  point  here,  of  import- 
ance, is  that  the  permission  of  violation  of  in- 
dividual rights  by  the  constitution  does  not  jus- 
tify that  violation,  nor  redress  it,  still  less  sanc- 
tify it. 

Affirmation  is  made  here  that  the  tariff  vio- 
lates the  right  of  every  individual  to  equitable 
standing  before  the  laws.  One  of  the  funda- 
mentals of  a  democracy  is  that  taxation  must 
bear  upon  all  citizens  impartially,  according  to 
their  ability  to  pay,  and  that  there  must  be  abso- 
lutely no  discrimination. 

First,  upon  that  point,  the  tariff  is  at  the  mo- 
ment of  collection,  a  tax  upon  the  public  for  the 
benefit  of  the  industries  supposed  to  be  protected. 
The  effect,  and  the  designed  effect,  of  the  tariff 
is  to  raise  for  the  time  being,  at  least,  the  price 
of  the  goods  produced  at  home  so  that  industries 
which  could  not  otherwise  engage  profitably  in 
business  with  foreign  competition,  may,  by  means 
of  the  higher  prices,  continue  their  activity  at 
a  profit.  But  this  system  is  in  direct  violation 
of  the  principle  of  justice  in  taxation  for  all 
the  people  equally.  By  means  of  the  tax,  part 
of  the  expenses  of  the  government  are  paid.  The 
money  comes  out  of  those  who  use  the  articles 
protected.     To  the  extent  of  their  contribution, 


INJUSTICE  OF  THE  TARIFF       81 

the  remaining  portion  of  the  people  have  their 
taxes  hghtened.  This  is  a  serious  discrimination 
and  amounts  to  hundreds  of  millions  of  dollars 
every  year.  Against  this  unequal  taxation  all 
users  of  protected  articles  have  a  right  to  pro- 
test. It  is  their  right  and  it  is  due  to  them  that 
the  discrimination  cease. 

But,  suppose  that  the  proposition  of  some  tar- 
iff supporters  is  admitted,  that  the  foreigner 
pays  the  tax.  It  would  be  a  fair  challenge  to 
ask  that  the  proposition  be  demonstrated  as  ap- 
plied to  goods  made  in  this  country.  But,  for 
the  moment,  concede  the  impossible.  Then,  the 
tariff  argument  runs,  as  long  as  the  tariff  is  con- 
tinued, after  the  system  has  had  its  perfect  work 
to  develop  home  competition,  the  prices  of  home- 
produced  goods  to  the  home  users  are  less  than 
they  would  be  if  the  users  were  at  the  mercy  of 
foreign  manufacturers  and  foreign  combinations 
of  trade.  Taking  this  argument  at  its  face 
value,  then  it  is  true  that  vast  expense  is  incurred 
in  maintaining  protection  in  order  that  the  benefit 
may  be  enjoyed  by  the  users  of  the  protected 
articles. 

On  whichever  leg  the  tariff  men  stand,  there- 
fore, whether  the  user  pays  the  tax  or  the  for- 
eign manufacturer  pays  it,  the  burden  or  the 
benefit  goes  to  the  users,  and  goes  according  to 
the  amount  of  goods  used.  On  whichever  leg 
the  tariff  men  stand,  the  system  applies  only  to 
a  portion  of  the  people.     If  the  users  pay  the 


82     THE  PASSING  OF  THE  TARIFF 

tax,  then  they  are  unjustly  taxed  while  other 
taxpayers  are  correspondingly  relieved.  If  the 
foreigner  pays  the  tax,  then  the  system  is  for  the 
benefit  of  the  users,  while  the  remainder  of  the 
people  have  their  taxes  increased  by  the  very  large 
sum  which  the  system  costs  every  year.  Injus- 
tive  is  therefore  inseparable  from  the  tariff  sys- 
tem, in  its  very  nature. 

It  is  true  that  theories  are  confused  and  dis- 
tinctions are  hazy  regarding  the  subordination 
of  the  individual  to  the  welfare  of  the  public. 
It  is  true  that  the  nation  asserts  the  right,  and 
the  people  gladly  accord  it  without  resistance, 
to  take  even  life  itself  when  needed  for  the  de- 
fense of  the  country,  and  there  is  no  thought  of 
a  demand  against  the  nation  for  the  value  of  a 
soldier  killed  or  dead  from  disease.  But  it  is 
also  true  that  such  times  are  rare  and  are  always 
regarded  as  emergencies.  Our  constitution  does 
not  permit  the  public  to  take  a  man's  property 
and  divide  it  among  the  remainder  on  the  ground 
that  only  one  would  suffer,  while  all  others  would 
gain.  If  it  is  unjust  to  do  that,  then  it  is  un- 
just to  tax  a  minority  in  order  that  a  majority 
may  gain,  and  the  argument  of  the  greatest  good 
of  the  greater  number  —  measured  by  financial 
standards  —  becomes  utter  nonsense.  Rights  are 
first  to  be  considered  and  our  constitution  is  so 
jealous  of  rights  that  the  property  of  every  man 
is  protected  by  all  the  sacredness  of  law  and  by 
all  the  military  strength  of  the  government. 


INJUSTICE  OF  THE  TARIFF        83 

But  the  tariff  man  may  try  to  justify  the  ap- 
parent injustice  by  saying  that,  in  the  long  run, 
the  benefits  of  the  tariff  are  equally  distributed 
so  that  all  taxpayers  share  alike  and  therefore 
the  system  should  not  be  condemned.  That  is, 
here  is  a  proposition  that  there  be  permitted,  un- 
der all  the  strength  of  the  government  and  its 
power  to  compel  obedience  to  law,  the  accumula- 
tion of  property  in  the  hands  of  certain  classes 
in  the  community  on  the  theory  that  it  will  be 
equally  distributed  to  all.  In  the  first  place, 
there  is  not  the  slightest  machinery  for  such  dis- 
tribution. Nobody  has  ever  provided  for  it. 
No  law  has  touched  the  subject.  No  estimate  of 
the  accumulation  has  ever  been  made.  No  watch- 
ful official,  jealous  to  see  that  the  weak  get  their 
full  share  with  the  strong,  has  ever  been  charged 
with  the  enforcement  of  this  ideal  justice. 

Mone}^  collected  by  protection  of  the  govern- 
ment, goes  into  the  pockets  of  manufacturers 
without  the  slightest  supervision  by  representa- 
tives of  the  people  to  see  that  it  is  applied  equit- 
ably. As  far  as  any  one  can  tell,  there  is  no 
difference  between  the  treatment  of  such  receipts 
by  manufacturers  and  other  protected  producers 
and  the  treatment  of  receipts  by  producers 
who  are  not  sheltered  by  the  tariff.  It  is  be- 
yond doubt  that  those  receipts,  when  distrib- 
uted to  partners,  or  stockholders,  are  used  for 
private  purposes  just  as  thoroughly  as  any  other 
incomes  are  used.     The  wealth  is  used  for  family 


84     THE  PASSING  OF  THE  TARIFF 

support,  for  houses  and  lands,  for  paintings  and 
music,  for  automobiles  and  yachts,  for  wines  and 
cigars,  for  whatever  the  need  or  the  luxurious 
taste  of  the  recipient  demands.  Not  the  slight- 
est effort  is  made  to  protect  it  and  to  prevent  its 
perversion  to  private  use  until  it  has  been  dis- 
tributed justly  to  the  people  according  to  the 
burden  borne  by  them  under  the  tariff,  whether 
the  user  pays  the  tariff  tax,  or  the  foreigner  pays 
it. 

All  these  points  are  familiar  to  the  public,  if 
the  public  will  only  put  its  thought  upon  what 
it  already  knows.  In  truth,  the  tariff  system  is 
packed  full  of  injustice  to  certain  unprotected 
classes  of  the  people  of  the  United  States,  and  it 
is  utterly  hopeless  to  try  to  infuse  justice  into 
it.  Every  one  knows  that  it  would  be  impossi- 
ble, in  practice,  to  make  any  division  of  the  fund 
which  the  protected  interests  get  from  the  tariff 
with  assurance  that  justice  would  be  done  to  all 
interested  persons.  In  practice,  the  administra- 
tion of  justice  is  too  complicated  to  be  even  at- 
tempted, taking  the  tariff  men  on  their  own 
ground.  But  when  the  system  is  put  on  the 
other  ground,  which  is  affimied  here  to  be  the 
only  sound  position,  that  the  tariff  is  a  serious 
tax  upon  the  users  of  the  articles  affected  by  the 
obstruction  to  trade,  then  the  justice  of  the  abo- 
lition of  the  system  becomes  imperative. 

Now,  for  a  further  line  of  attack  upon  the  tar- 
iff, turn  back  once  more  to  the  fundamentals  of 


INJUSTICE  OF  THE  TARIFF       85 

our  political  institutions.  Read  again  from  the 
Declaration  of  Independence  these  words :  "  We 
hold  these  truths  to  be  self-evident:  that  all  men 
are  created  equal ;  that  they  are  endowed  by  their 
Creator  with  certain  unalienable  rights;  that 
among  these  are  life,  liberty  and  the  pursuit  of 
happiness  .  .  the  present  king  of  Great  Britain 
.  .  has  combined  with  others  .  .  giving  his  as- 
sent to  their  acts  of  pretended  legislation:  for 
cutting  off  our  trade  with  all  parts  of  the  world." 

Article  V  of  the  amendments  to  the  Constitu- 
tion of  the  United  States,  last  clause,  says :  "  nor 
shall  private  property  be  taken  for  public  use, 
without  just  compensation."  Article  I  of  the 
Declaration  of  Rights  of  Massachusetts  num- 
bers among  the  unalienable  rights  of  all  men 
"  that  of  acquiring,  possessing  and  protecting 
property."  Article  X  of  the  same  Declaration, 
last  clause,  says :  "  whenever  the  public  exigen- 
cies require  that  the  property  of  any  individual 
shall  be  appropriated  to  public  uses,  he  shall  re- 
ceive a  reasonable  compensation  therefor."  [Ci- 
tation is  not  made  here  of  the  fourteenth  amend- 
ment to  the  Constitution  of  the  United  States ; 
"  nor  shall  any  state  deprive  any  person  of  life, 
liberty  or  property  without  due  process  of  law," 
because  it  is  admitted  that  the  empowering  law 
exists,  though  it  destroys  human  rights.] 

Here  are  principles  which  destroy  utterly  the 
argument  for  the  tariff  on  the  ground  of  "  the 
greatest  good  of  the  greatest  number."     If  that 


86     THE  PASSING  OF  THE  TARIFF 

plea  were  sound,  then  any  rich  man  could  be  de- 
prived of  his  property  that  it  might  be  dis- 
tributed among  poor  men.  The  practical  answer 
of  the  people  to  the  argument  of  the  greatest 
good  for  the  greatest  number  is  that  justice  is  a 
higher  good  than  property  obtained  without  giv- 
ing an  equivalent.  Justice,  sacred  justice  to 
every  man,  must  be  secured  in  respect  to  his  prop- 
erty rights. 

If  these  declarations  in  these  authoritative  doc- 
uments were  only  man-made,  then  their  force 
Avould  be  much  weakened.  But  it  is  because  they 
are  held  to  be  man-made  statements  of  God-re- 
vealed truth  inherent  in  the  nature  of  men  as  free 
wills,  associated  in  relations  established  not  by 
man,  but  by  God,  that  they  have  their  force. 
In  the  very  nature  of  men  as  free  wills,  our  politi- 
cal principles  affirm,  inhere  rights  to  obtain  and 
to  hold  property.  It  is  admitted  on  all  sides 
that  the  exigencies  of  war,  involving  the  existence 
of  the  political  body  itself,  give  it  claims  upon 
the  citizen  supreme  over  his  rights  to  his  own  life 
and  property.  It  is  admitted  that  the  health  and 
police  powers  of  the  body  politic  rise  higher  than 
property  or  personal  rights  of  the  citizen.  But, 
in  respect  to  property  —  and  the  whole  discussion 
is  regarding  property  at  a  time  when  no  war 
threatens  the  existence  of  the  state  —  the  equality 
of  free  wills,  equality  in  opportunity  to  make  the 
most  and  the  best  use  of  their  powers,  is  opera- 
tive. 


INJUSTICE  OF  THE  TARIFF        87 

If  it  was  a  just  complaint  against  the  king 
of  Great  Britain  that  he  "  cut  off  our  trade  with 
all  parts  of  the  world,"  then  that  right  to  trade 
inhered  in  the  persons  who  desired  to  trade,  not 
in  the  government  supreme  over  them,  nor  in  the 
colonies  as  political  units  separate  from  Great 
Britain.  If  the  greatest  good  of  the  greatest 
number  is  sound  doctrine,  then  the  king  had  a 
right,  if  he  thought  it  was  for  the  prosperity  and 
strength  of  his  whole  kingdom,  to  cut  off  the 
American  colonies  from  foreign  trade.  If  that 
doctrine  is  not  sound,  then  the  successor  of  the 
king,  the  government  of  the  United  States,  even 
although  it  is  set  up  by  the  people  themselves, 
has  no  right  whatever  to  invade  the  sacred  do- 
main of  equal  free  wills  exercising  their  rights 
to  trade  according  to  their  judgment.  When 
would-be  traders  are  cut  off  by  their  government 
from  their  "  natural,  essential  and  unalienable 
rights  "  of  "  trade  with  all  parts  of  the  world," 
then  the  OA^erthrow  of  their  rights  is  as  complete 
and  as  unjustifiable  as  was  the  action  of  the 
British  king  against  the  American  colonies,  and 
the  injustice  is  of  precisely  the  same  immoral 
quality,  in  violation  of  personal  rights  inherent 
in  men  by  the  very  nature  of  their  being.  If  the 
natural  status  of  trade  is  artificially  disturbed  by 
enforcement  of  a  political  theory  which  puts 
property  into  the  hands  of  certain  classes  and 
destroys  the  opportunity  which,  if  not  destroyed, 
would  bring  property  to  other  classes,  then  the 


88    THE  PASSING  OF  THE  TARIFF 

property  rights  of  the  latter  classes  have  been 
also  destroyed  by  the  action  of  the  government, 
and  the  government  becomes  despotic  and  op- 
pressive, in  direct  violation  of  the  rights  af- 
firmed by  our  Declarations  and  Constitutions  as 
inherent  in  men  as  individuals  because  of  the  very 
fact  of  their  being  created  free  and  equal. 

We  must  go  back  of  Constitutions  and  laws  to 
the  fundamental  nature  of  individual  man  and  the 
relations  of  these  ultimate  atoms  of  society  to 
each  other  in  a  political  organism,  whether  or  not 
our  constitutions  and  laws  set  forth  the  truth 
adequately.  But  it  is  accepted  by  the  latest  phi- 
losophy of  our  day,  as  well  as  by  that  of  the  time 
of  the  framing  of  tlie  constitution,  that  every 
person  is  a  free  will  and,  by  that  very  fact,  pos- 
sesses "  certain  natural,  essential  and  unalienable 
rights."  That  is,  God  has  put  men  on  the  earth 
under  given  conditions  which  he  has  established. 
Whether  or  not  men  like  to  bring  God  into  dis- 
cussions of  this  sort,  they  are  forced  to  do  so,  if 
they  get  to  the  bottom  of  things.  What  the  di- 
vine rights  are  to  put  obstacles  in  the  way  of  the 
acquisition  of  property  by  men,  and  how  far 
the  Creator  is  justified  in  making  natural  laws 
to  interfere  with  "  the  pursuit  of  happiness,"  is 
beyond  our  criticism  in  the  present  discussion. 
The  human  state  accepts  the  supremacy  and  the 
wisdom  of  God,  at  least  because,  in  practical  ad- 
ministration, it  is  forced  to  do  so.  Argument 
and  controversy  cease  at  the  threshold  of  practi- 


INJUSTICE  OF  THE  TARIFF        89 

cal  administration.  Theory  may  go  as  much 
further  as  it  pleases.  The  individual,  also,  must, 
by  force,  accept  the  natural  conditions  placed 
upon  him.  But  when  a  disorganized  body  of 
men,  or  organized  society,  invades  the  sphere  of 
his  natural  rights  then  an  injustice  is  done,  and 
an  occasion  for  resistance  arises.  Now,  these  con- 
ditions and  this  status  of  rights  being  inherent  in 
the  person,  independent  of  the  government,  or 
of  the  will  of  a  majority  of  his  fellow  men,  then 
when  the  government,  representing  a  majority  of 
his  fellow  men  —  and  governments  in  democra- 
cies must  be  by  majorities  —  interferes  with  the 
exercise  of  property  rights,  not  for  the  police 
power  of  the  state,  nor  for  its  health,  the  gov- 
ernment invades  the  rights  of  men  and  its  policy 
should  be  changed. 

Such  a  policy  is  our  tariff  policy.  It  de- 
stroys the  property  rights  of  classes.  It  inter- 
feres with  the  constitutional  right  to  the  pursuit 
of  happiness.  It  acts  upon  the  theory  of  "  the 
greatest  good  to'  the  greatest  number,"  thereby 
sacrificing  large  numbers  of  innocent  and  helpless 
citizens  in  order  to  secure  the  supposed  pros- 
perity of  the  whole  —  putting  the  policy  upon 
the  highest  possible  moral  plane  that  any  of  its 
supporters  can  mention.  But  this  Is  precisely  of 
the  same  quality  as  confiscating  the  property  of  a 
rich  man  in  order  to  divide  it  among  the  poor, 
or,  worse  yet,  of  taking  the  property  of  even 
a  poor  man  and  distributing  It  to  others  on  the 


90      THE  PASSING  OF  THE  TARIFF 

sole  ground  that  he  is  but  one  and  the  others  are 
more  than  one,  and  therefore  a  larger  number  of 
persons  have  been  benefited  by  the  confiscation. 

In  two  distinct  lines  of  activity  the  tariff  inter- 
feres with  the  rights  of  men  to  acquire  and  hold 
property  with  an  equality  of  opportunity  with 
every  other  person  under  the  Constitution.  One 
of  these  is  when  the  tariff  destroys  possible  profit- 
able enterprises  in  which  men  would  otherwise 
engage.  The  other  is  when  it  puts  burdens  upon 
them  in  the  expense  of  articles  of  living.  In 
each  of  these  respects  good  reason  exists  for  be- 
lieving that  the  burdens  upon  the  people  are 
enormous,  that  the  prevention  of  possible  prop- 
erty is  a  serious  restriction  upon  the  develop- 
ment of  the  prosperity  of  the  country,  and  that 
the  burdens  of  people,  especially  of  moderate 
means,  are  heavily  increased  by  the  higher  prices 
caused  and  sustained  by  the  tariff. 

In  regard  to  the  possible  enterprises  in  which 
men  might  engage  were  it  not  for  the  tariff, 
lists  of  them  have  been  prepared  repeatedly  with 
more  or  less  fulness  and  the  fact  is  established 
to  the  satisfaction  of  the  investigator  of  tliis  par- 
ticular phase  of  tariff  operations.  The  point 
here  is  the  matter  of  principle,  the  individual's 
inherent  right  to  equal  opportunity  with  others 
to  the  use  of  his  powers  for  the  honest  acquisi- 
tion of  property.  Here,  again,  we  come  down 
to  the  fundamental  conditions  of  existence,  to  the 


INJUSTICE  OF  THE  TARIFF        91 

conditions  established  by  higher  power  than  hu- 
man laws.  Men  are  put  upon  the  earth,  not  by 
their  own  will,  with  powers  not  of  theii*  own 
bestowal,  amid  circumstances  not  of  their  own 
creation.  Every  one  is  put  on  the  earth  under 
the  most  imperative  and  awful  mandates  re- 
garding the  obtaining  of  supplies  wherewith  to 
maintain  his  existence.  Unless  he  satisfies  con- 
ditions supreme  over  him  in  regard  to  the  sup- 
port of  his  body,  he  dies.  Needs,  means  of  meet- 
ing those  needs,  articles  to  be  secured  by  those 
means,  everything  is  made  by  a  Power  higher 
than  man.  Under  the  conditions  of  worthiness 
of  having  the  needs  supplied  and  only  under 
those  conditions,  does  he  satisfy  his  needs.  (In 
this  discussion  of  course  it  is  aside  from  the  point 
to  discuss  the  cases  of  infants,  invalids,  or 
other  dependent  or  defective  persons.)  Why  the 
Supreme  Power  makes  the  conditions  so  onerous 
at  times  as  to  destroy  life,  why  abundance  at 
other  times  fills  the  stores  of  the  provident  is  not 
for  man  to  pass  upon,  however  much  he  may 
complain,  rebel,  think  or  wonder  at  the  facts. 
He  must  take  what  the  Supreme  Power  gives. 
With  his  endowment  with  means  of  effort  amid 
the  objects  of  effort  goes  his  right  to  equality, 
as  a  free  being,  one  of  the  human  race,  all  made 
on  the  same  terms,  in  effort  to  secure  property  by 
giving  the  equivalent.  (For  purposes  of  this 
discussion   all   cases   of  inheritance  and  robbery 


92     THE  PASSING  OF  THE  TARIFF 

have  no  bearing  upon  the  main  point.)  Since 
all  persons  are  made  hy  the  Supreme  Power,  (the 
Maker  alike  of  the  person,  of  the  needs  and  of 
the  means  of  supph'ing  the  needs,  who  has  made 
all  persons  equal),  the  interference  of  outside  au- 
thority or  force  to  prevent  the  free  exercise  of  the 
full  abilities  of  each  person  in  securing  property 
is  a  denial  of  the  inherent  rights  bestowed  by  the 
Creator,  which  are  affirmed  by  our  fundamentals 
of  government.  Therefore  such  interference  is 
not  to  be  tolerated  by  a  free  people.  Just  as 
soon  as  the  people  appreciate  what  their  freedom 
really  means,  they  will  put  an  end  to  this  enor- 
mous injustice  to  the  many  for  the  benefit  of  the 
few. 

Regarding  the  second  line  of  injustice,  the 
imposition  of  burdens  upon  the  consumers  of 
protected  articles,  this  line  is  so  familiar  and 
forms  the  main  staple  of  the  argument  for  re- 
form so  generally,  that  no  further  mention  is 
needed  than  to  say  that  the  human  mind  is  not 
broad  enough,  nor  capable  enough  of  grasping 
complicated  situations  to  comprehend  the  extent 
and  the  intricacy  of  the  evils  caused  by  the  added 
prices  which  are  put  upon  consumers  by  the  tar- 
iff. But  with  growing  rebellion  against  the 
evils  the  victims  will  press  upon  the  tariff  men  the 
logical  argument  that  if  the  tariff  is  imposed  for 
the  sake  of  making  home  prices  ultimately  lower 
than    foreign,   then    when   the   lower   shall    have 


INJUSTICE  OF  THE  TARIFF        93 

been  reached,  when  the  infant  industry  is  really 
adolescent,  if  not  mature,  then  the  youth  should 
go  alone  and  the  people  be  given  the  benefit  of  a 
removal  of  the  duties  which  obstruct  trade  with 
manufacturers  in  all  parts  of  the  world. 


CHAPTER  VII 
INTERNATIONAL   JUSTICE 

Most  important  of  all  the  action  taken  by  the 
Hague  Conference  of  1907,  with  perhaps  the  ex- 
ception of  the  recommendation  that  an  interna- 
tional prize  court  be  established,  was  the  adop- 
tion of  the  following  recommendation: 

"  The  Conference  recommends  to  the  Powers 
the  holding  of  a  third  peace  conference,  which 
might  take  place  within  a  period  similar  to  that 
which  has  elapsed  since  the  preceding  conference, 
on  a  date  to  be  set  by  joint  agreement  among  the 
Powers." 

This  recommendation  was  adopted  unani- 
mously. It  marks  the  agreement  of  the  Powers 
upon  the  recognition  of  the  movement  which 
is  carrying  all  of  the  nations  into  their  rightful 
places  as  constituent  members  of  the  body  politic 
of  the  world.  This  movement  is  sure  to  be  ir- 
resistible because  it  is  based  upon  a  truth  funda- 
mental in  the  very  existence  of  mankind.  It  is 
backed  by  a  force  stronger  than  all  the  divisive 
forces  which  drive  the  nations  apart  and  which 
make  warring  fragments  of  all  human  kind. 
Neither  time,  nor  space,  nor  climate,  nor  oceans, 
nor  mountains,  nor  diversity  of  language,  nor 
bigotry  of  religion,  nor  hatred  of  conquered  for 
conquerors,  nor  jealousy  of  political  or  commer- 

94. 


INTERNATIONAL  JUSTICE         95 

cial  rivals,  nor  any  other  power  which  separates 
mankind  into  groups  by  themselves,  can  with- 
stand the  centralizing  force  which  makes  for 
their  unity. 

This  truth  might  have  been  denied  by  the  rep- 
resentatives of  the  nations  in  any  year  earlier 
than  1907.  But  in  that  year,  for  the  first  time 
in  the  history  of  mankind,  a  conference  was  held 
at  which  every  nation  on  earth  was  represented 
and  that  Conference  adopted  unanimously  the 
recognition  of  the  unity  of  all  the  nations. 
Their  recommendation  is  that  the  next  logical 
step  shall  be  taken  in  the  development  of  the 
process  of  expressing  the  will  of  the  world  which 
is  real  world  legislation,  a  process  which  has  al- 
ready reached  a  notable  development  and  is  mov- 
ing forward  with  increasing  momentum. 

But,  further  than  this,  the  Conference  of  1907 
set  up  the  beginning  of  the  world  judiciary. 
That  Is  the  unique  distinction  of  this  interna- 
tional gathering.  World  legislation,  by  its  own 
peculiar  processes,  had  occurred  previously. 
Germs  of  the  world  executive  department  were 
already  in  sight  In  several  specific  instances  when 
the  Conference  of  1907  met.  But  there  was  only 
the  potency  of  the  world  judiciary  existing,  and 
that  seemed  to  lie  In  the  Hague  Court  of  Arbi- 
tration. But  the  Conference  struck  out  a  new 
line  of  advance.  By  the  recommendation  that 
the  Powers  agree  upon  an  international  prize 
court  It  did  all  that  was  in  its  power  to  make  a 


96     THE  PASSING  OF  THE  TARIFF 

positive,  practical  beginning  with  the  judiciary, 
of  the  world.  It  is  true  that  war  will  be  re- 
quired to  call  into  action  such  a  court  and  to  se- 
cure from  its  judges  a  declaration  that  such  and 
such  are  principles  of  law  for  all  nations. 

Such  declaration  will  be  the  first  formal  ut- 
terance in  the  history  of  the  world,  saying  what 
is  law  for  all  nations.  Hitherto  international 
law  has  been  without  formal  and  official  state- 
ment, but  rests  upon  a  less  stable  foundation. 
This  Conference  of  1907,  then,  rendered  con- 
spicuous serv^ice  to  mankind  and  it  approved  a 
view  of  human  relations  which  commands  the  at- 
tention of  the  world.  That  view  concerns  all 
tariffs  vitally,  for  it  makes  for  their  annihila- 
tion. 

Tariff  problems  cannot  be  settled  rightly  with- 
out going  to  the  very  bottom  tiiith  in  the  rela- 
tion of  men  and  of  nations.  The  discussion  rests 
upon  deeper  truths  than  financial.  Yet  the  idea 
of  property  is  involved.  First  of  all  comes  the 
question,  "Who  owns  the  earth.''"  Some  peo- 
ple have  a  prejudice  In  favor  of  the  Bible,  as  a 
source  of  authority,  though  it  is  never  intro- 
duced In  any  tariff  discussion.  Yet,  it  is  being 
recognized  more  and  more  clearly  that  there  is 
no  division  of  truth ;  there  is  no  separation  of 
science  Into  sciences  other  than  the  separations 
made  by  the  limitations  of  the  human  mind.  A 
Bible  truth  is  a  scientific  truth  as  truly  as  any 
truth  in  a  book  on  physics.     The  Bible  answers 


INTERNATIONAL  JUSTICE       97 

the  question  of  ownership  of  the  earth :  "  The 
earth  is  the  Lord's  and  the  fulness  thereof;  the 
world  and  thej  that  dwell  therein." 

But  the  Bible  goes  further.  It  tells  who  are 
trustees  of  the  earth: 

"  Be  fruitful  and  multiply  and  replenish  the  earth 
and  subdue  it,  and  have  dominion  over  the  fish  of 
the  sea  and  over  the  birds  of  the  heavens  and  over 
every  living  thing  that  moveth  upon  the  earth." 

or,  as  it  is  put  in  another  place: 

"  Thou  makest  him  to  have  dominion  over  the  works 
of  thy  hands; 
Thou  hast  put  all  things  under  his  feet; 
All  sheep  and  oxen, 
Yea,  and  the  beasts  of  the  field. 
And  the  birds  of  the  heaven  and  the  fish  of  the  sea. 
Whatsoever  passeth  through  the  paths  of  the  seas." 

There  is  the  trusteeship  clearly  expressed,  the 
Owner  not  abating  a  particle  of  his  claim  of 
ownership,  but  putting  mankind  in  as  trustees 
and  masters  of  every  created  thing,  so  that  man 
has  power  of  life  and  death  and  of  complete  dis- 
posal. No  created  thing,  if  its  life  is  needed  for 
the  well  being  of  man,  has  the  right  of  existence 
superior  to  that  need.  To  some  people  the  Bible, 
with  wonderfully  direct  and  vigorous  affirma- 
tion, seems  to  go  right  to  the  very  root  of  the 
relations   of  man  to   God  and  of  men  to   men. 


98      THE  PASSING  OF  THE  TARIFF 

But  some  people  cannot  abide  such  quotations. 
They  regard  such  truths,  or,  at  least,  such  au- 
thority, as  wholly  out  of  place  in  a  tariff  discus- 
sion. But  they  recognize  the  authority  of 
science.  Yet  science  affirms  that  man  is  of  one 
blood,  as  the  Bible  does.  It  is  true  that  some 
science  has  denied  it,  but  today  the  dispute  stands 
in  this  position:  that  the  best  science  cannot 
prove  a  diverse  origin  for  the  human  race,  while 
good  scientists  affirai  the  oneness  of  origin.  If 
no  science  can  prove  the  diversity  because  men 
are  so  much  alike,  then,  for  purposes  of  tariff 
legislation,  it  is  practically  safe  to  regard  man- 
kind as  one  in  origin. 

But  science,  the  best  modem  type,  affirms  the 
freedom  of  the  will  of  each  normal  person.  It 
agrees  with  the  common  judgment  of  all  people 
and  with  the  affirmations  of  all  courts  which  pun- 
ish criminals  on  the  theory  that  they  are  responsi- 
ble for  their  crime.  Science,  furthermore,  agrees 
with  the  Bible  upon  that  point,  for  it  is  a  vital 
part  of  the  relation  of  men  to  God,  as  revealed 
in  the  Bible,  that  men  are  accountable  for  their 
acts.  So  there  is  absolute  agreement  of  the  three 
highest  authorities  —  the  Bible,  science,  and  the 
common  judgment  of  mankind. 

Further,  free  wills  are  equal  in  the  essence  of 
their  being.  This  is  a  teaching  of  the  Bible,  with 
its  affirmation  that  the  Searcher  of  Hearts  is  no 
respecter  of  persons.  It  is  the  affirmation  of  the 
Declaration  of  Independence  that  "  all  men  are 


INTERNATIONAL  JUSTICE         99 

created  equal,"  and  of  the  Massachusetts 
bill  of  rights  that  "  all  men  are  born  free 
and  equal."  The  very  latest  deliverance  by 
the  people  of  the  United  States  is  that  their 
people  must  regard  the  fundamental  truths 
in  the  Declaration  of  Independence.  By  the 
enabling  act  for  the  admission  of  Oklahoma  into 
the  Union,  passed  by  the  Congress  of  the  United 
States,  which  became  law  June  16,  1906,  it  was 
put  in  as  one  of  the  conditions  of  membership 
in  the  Union  that  "  the  constitution  shall  be  re- 
publican in  form,  and  make  no  distinction  in 
civil  or  political  rights  on  account  of  race  or 
color,  and  shall  not  be  repugnant  to  the  Consti- 
tution of  the  United  States  and  the  principles  of 
the   Declaration   of  Independence." 

President  Roosevelt,  in  his  proclamation  of 
November  16,  1907,  declaring  the  admission  of 
Oklahoma  to  the  Union,  specifically  mentioned 
that  its  constitution  was  not  repugnant  to  the 
principles  of  the  Declaration  of  Independence. 
Therefore  the  people  of  the  United  States  have 
officially  affirmed,  at  their  latest  opportunity,  as 
a  condition  of  membership  in  the  Union,  the  su- 
premacy of  the  principle  that  "  all  men  are  cre- 
ated equal." 

We  have  a  seven-strand  argument  woven  into 
one  —  the  revelation  of  the  Bible,  the  affirmation 
of  science,  the  dawning  self-consciousness  of  man- 
kind's unity  as  developed  in  the  Hague  Confer- 
ence, the  practices  of  all  courts,  the  common  sense 


100     THE  PASSING  OF  THE  TARIFF 

of  the  mass  of  men,  the  assurance  of  the  Declara- 
tion of  Independence,  and  the  latest  utterance  of 
the  people  of  the  United  States  —  to  the  effect 
that  all  mankind  is  a  unit  beyond  the  power  of 
any  divisive  forces  to  drive  asunder.  In  that 
unity  every  individual  person  has  his  rightful 
place  and  his  just  sphere  of  activit}^,  sacred  from 
invasion  by  his  fellows,  by  virtue  of  being  created 
free  will,  of  precisely  the  same  quality  as  each 
and  every  other  free  will  on  earth.  To  that 
unity  every  individual  person  owes  duties  of 
serA'ice,  for  he  is  made  a  part  of  the  organic 
whole  as  truly  as  he  is  made  free  will.  Over  that 
unity  the  central  authority  must  rule  by  virtue 
of  the  rightfulness  that  every  organism  have  a 
head  and  means  of  activity  as  a  whole.  To  that 
unity  the  central  authoritj'^  owes  duties  of  service 
to  guarantee  that  every  organ  perform  its  func- 
tion to  the  organism  as  a  whole,  to  secure  it  in 
healthful  condition,  and  to  protect  every  indi- 
vidual person  in  his  rights  as  distinct  from  the 
rights  of  any  and  every  other. 

The  doctrine  of  local  self-government  — 
whether  of  national  sovereignty  against  the  abso- 
lute supremacy  of  world  sovereignty,  or  of  state 
sovereignty  in  our  nation  against  our  national 
sovereignty,  or  of  local  municipal  rights  against 
state  sovereignity  —  does  not  reach  its  logical  and 
necessary  completion  until  it  comes  down  to  the  in- 
dividual person  with  his  rights  and  duties  as  a 
constituent  atom  of  the  immense  whole,  with  free 


INTERNATIONAL  JUSTICE        101 

will  endowed  with  powers  for  the  securing  of  hfe, 
property  and  happiness,  rightfully  demanding 
free  scope  for  the  exercise  of  those  powers  in  any 
part  of  the  earth,  and  under  obligation  to  ren- 
der full  measure  of  support,  in  just  proportion, 
to  the  central  authority. 

On  the  other  hand,  the  doctrine  of  central  au- 
thority —  whether  of  absolute  world  sov- 
ereignty against  national  sovereignty,  or  of 
national  authority  in  our  nation  over  our  states, 
or  of  our  states  over  their  municipal  governments, 
or  of  municipal  governments  over  every  in- 
dividual person  under  them  —  does  not  reach 
its  logical  and  necessary  completion  until  it 
secures  the  perfect  formation  and  operation 
of  an  organism  in  which  every  nation,  every 
state,  every  municipality  and  every  person  has 
frictionless  jointure  with  the  whole  in  perfect 
operating  condition,  each  part  having  free  scope 
for  action,  subject  only  to  the  condition  that  it 
renders  all  the  service  necessary  for  the  efficiency 
of  the  whole  as  the  uniting  and  governing  power 
over  all  the  parts. 

Such  is  the  organism  of  mankind,  master  of 
the  world  for  which  it  is  trustee.  With  every 
organ,  or  every  part,  working  for  the  welfare  of 
the  whole,  each  would  perform  the  function  for 
which  it  is  best  fitted  by  its  endowments  of  struc- 
ture, position  and  opportunity,  and  the  total 
of  service  in  all  which  goes  for  the  material,  in- 
tellectual, moral  and  spiritual  welfare  of  the  en- 


102      THE  PASSING  OF  THE  TARIFF 

tire  organism  would  be  at  the  ideal  maximum. 
Each  part  would  give  the  most  which  could  be 
secured  by  any  possible  arrangement  for  the  wel- 
fare of  the  whole.  With  the  largest  possible 
product  from  the  entire  world  brought  forth 
constantly  for  distribution  to  the  different  parts 
in  return  for  their  contributions  to  the  whole 
stock  of  goods,  there  would  be  secured  the  great- 
est possible  material  prosperity,  in  the  very  na- 
ture and  under  the  very  conditions  of  the  case. 
Moreover,  with  all  the  organism  working  har- 
moniously for  its  general  welfare,  there  would 
assuredly  accompany  the  highest  material  pros- 
perity a  degree  of  friendliness  and  Interchange 
of  helpful  ideas  and  practices  markedly  In  con- 
trast to  international  jealousies,  commercial  wars 
and  constant  suspicions,  to  say  nothing  of  the 
actual  military  warfare  familiar  to  all  the  world. 
But,  right  across  this  perfect  organization  of 
the  people  of  the  earth  comes  the  obstructive  tar- 
iff doctrine,  cutting  the  unity  Into  fragments, 
destroying  the  organic  activity  of  the  members 
of  the  world  body  politic,  interposing  obstacles 
to  the  efficient  operation  of  the  beneficent  laws  of 
self-service  of  man  by  man,  crippling,  wasting, 
paralyzing  and  impoverishing.  That  all  nations 
follow  this  obstruction  policy  does  not  relieve,  but 
Inflames  the  evil.  Suicide  Is  none  the  less  mur- 
der and  none  the  less  an  offense  against  right  be- 
cause the  victim  Is  self  and  not  another.  That 
all  nations  formally  deny  the  unity  of  mankind 


INTERNATIONAL  JUSTICE        103 

by  their  govenimcntal  action,  and  refuse  to  rec- 
ognize the  organism  of  whicli  they  are  essential 
parts  in  no  way  weakens  any  one  of  the  seven 
strands  of  the  argument  by  which  the  unity  of 
mankind  is  affirmed.  In  its  very  essence  the  tar- 
iff obstruction  inflicts  great  injustice  upon  every 
nation,  upon  its  citizens  individually  and  upon 
the  body  of  mankind  as  a  whole. 

It  is  to  be  admitted  frankly,  as  far  as  the  argu- 
ment is  based  upon  the  political  unity  of  the 
world,  that  such  unity  is  not  accomplished,  nor 
even  very  much  realized.  But  it  is  in  sight,  even 
though  the  nations  still  assert  the  doctrine  of  ab- 
solute national  sovereignty,  for  there  is  abun- 
dant evidence,  which  need  not  be  rehearsed  here, 
to  prove  that  the  political  unity  of  mankind  in  a 
working  organization  is  in  progress,  and  that  the 
three  essential  departments  of  legislature,  exec- 
utive and  judiciary  can  already  be  discerned  in 
the  process  of  formation. 

But  the  full  force  of  the  argument  against  ob- 
struction is  not  at  all  weakened  by  the  absence 
of  a  working  political  unity  of  the  world  for  the 
time  being.  Inasmuch  as  the  world  is  organized 
commercially  far  better  than  it  is  politically,  and 
inasmuch  as  the  argument  has  to  do  mainly  with 
the  production  of  property,  all  the  truth  of  the 
service  of  the  whole  by  the  parts  and  the  gain  to 
the  parts  from  service  to  the  whole,  and  all  that 
has  been  said  of  the  rights  of  free  wills  to  free 
action  when  not  harmful  to  the  welfare  of  the 


104     THE  PASSING  OF  THE  TARIFF 

whole,  bears  with  full  force  upon  the  situation 
under  discussion. 

Freight  lines  for  the  transportation  of  goods 
from  the  place  of  production  to  a  more  or  less 
distant  better  market  than  the  home  market  have 
been  established,  or  are  being  established,  wher- 
ever the  temptation  of  an  apparent  and  suflB- 
cient  profit  appeals  to  the  legitimate  instinct,  or 
judgment,  which  leads  men  to  reap  profits  wher- 
ever reasonable  —  to  state  the  proposition  mildly, 
without  reference  to  cupidity  or  the  spirit  of  ag- 
gression upon  the  rights  of  others.  This  very 
situation  carries  its  own  truth  upon  its  face.  Men 
will  not  live  In  places  where  the  conditions  of 
existence  are  less  advantageous  than  they  can  find 
elsewhere,  with  their  knowledge  of  other  places 
and  their  means  of  transporting  themselves. 
The  very  fact  that  a  community  exists  at  a  given 
point,  even  an  Esquimo  village,  proves  that  at 
that  place  is  sufficient  abundance  of  the  means  of 
living,  according  to  their  desire  of  the  good  things 
of  life,  to  prevent  their  removal  elsewhere.  That 
is,  there  is  some  advantage  in  that  locality  over 
other  localities  where  the  people  might  live,  for 
there  are  so  many  unoccupied  places  on  the  earth 
that  the  occupied  leave  vast  uninhabited  regions. 
Good  soil  for  particular  kinds  of  plants,  good 
grazing  for  animals,  good  water  power  for  manu- 
factures, children  who  must  furnish  employment 
to  teachers,  people  who  must  have  physicians, 
educated    taste    which    demands    sculpture    and 


INTERNATIONAL  JUSTICE        105 

paintings,  all  these  things  and  hundreds  of  others, 
make  men  decide  to  live  in  their  chosen  place. 
Every  place  where  men  live  has  its  yield  of  good 
things,  in  the  opinion  of  the  worker  who  abides 
there,  which  leads  him  to  choose  to  remain  there 
rather  than  to  move  on.  The  frequent  occur- 
rence of  removals  in  order  to  better  one's  condi- 
tion is  the  best  illustration  of  the  argument  and 
proves  the  fluidity  of  mankind  to  meet  the  con- 
ditions. 

Every  place,  therefore,  having  its  peculiar  ad- 
vantage, its  natural  equipment  is  used  for  the 
largest  production  of  Avealth.  At  sea  fishermen 
fish,  not  try  to  pick  huckleberries.  In  a  rubber 
forest  they  collect  rubber,  not  tea,  and  so  on. 
Wealth  comes  most  easily  where  nature  has  put 
It  most  lavishly.  In  view  of  this  patent  fact, 
It  Is  not  sajang  too  much  to  affirm  that  the  ob- 
struction doctrine  rests  upon  the  foundation  of 
lack  of  business  originality,  plus  an  envious  im- 
itatlveness  of  communities  or  of  establishments 
which  are  prosperous.  Men  here  see  that  men 
over  there  are  making  money  by  reason  of  the 
advantages  which  they  en j  oy .  The  cry  goes  up : 
"  We  could  make  money  like  that  here,  if  we  had 
the  conditions  they  have  over  there."  Then 
comes  the  attempted  Interference  under  sanction 
of  law  with  the  natural  distribution  of  advan- 
tages, the  neglect  of  the  treasures  of  nature  al- 
ready at  hand  in  view  of  the  disquieting  effect 
of  seeing  other  men  make  money.     This  brings 


106      THE  PASSING  OF  THE  TARIFF 

us  into  the  well  beaten  path  of  familiar  argu- 
ment and  there  is  no  need  to  pursue  it  further, 
beyond  emphasizing  the  unwisdom  and  futilitj^  of 
neglecting  one's  own  natural  advantages  in  order 
to  produce  other  objects  under  comparative  dis- 
advantages. 

Having  come  out  into  the  familiar  path,  now 
turn  back  from  it  again  and  see  how  the  obstruc- 
tion policy  inflicts  serious  injustice  upon  every 
nation  which  adopts  it.  Laws  of  trade  act  ac- 
cording to  their  own  nature  regardless  of  the  pur- 
pose of  the  persons  who  put  tliem  into  action. 
If  it  is  in  the  nature  of  obstruction  of  trade  to 
benefit  the  communities  between  which  the  ob- 
structions are  erected  then  ever^^  community 
should  be  hedged  in  by  itself.  The  obstruction- 
ists who  remove  obstructions  from  between  the 
states  of  the  United  States,  and  prohibit  their 
erection  by  law,  on  the  ground  that  we  are  one 
nation  and  that  conditions  are  different  from 
what  they  are  between  different  nations,  are  in- 
consistent. States  of  the  United  States  are 
suffering  today  because  of  lack  of  obstructions 
to  trade  between  them,  if  the  obstruction  theory  is 
correct.  If  it  is  not  correct,  then  the  nations  be- 
tween which  obstructions  are  erected  by  law,  ac- 
cording to  tlie  obstruction  doctnne,  are  suffer- 
ing by  reason  of  the  obstructions.  Consistency 
requires  the  same  doctrine  for  both  cases,  and 
since  the  brotherhood  of  the  people  of  the  United 
States  is  held  by  the  obstinictionists  to  make  un- 


INTERNATIONAL  JUSTICE       lOT 

wise  the  erection  of  obstructions  between  the 
states,  in  the  same  way  the  brotherhood  of  all 
mankind  prohibits  the  erection  of  obstructions 
between  the  nations. 

Whether  or  not  national  constitutions  or  laws 
recognize  the  rights  inhering  in  nations  and  in 
individuals,  those  rights  are  indestructible. 
Whether  those  rights  are  violated  by  nations  in- 
flicting injustices  upon  themselves  or  by  majori- 
ties inflicting  injustice  upon  minorities,  none  the 
less  is  there  great  violation  by  shutting  off"  na- 
tions, as  well  as  individuals,  from  their  rights  to 
trade  wherever  upon  earth  they  please,  so  long 
as  they  do  not  off'end  against  the  health  and 
morality  of  mankind,  in  other  words,  as  long  as 
they  abstain  from  offenses  corresponding  to  those 
which  are  forbidden  within  separate  nations  by 
their  health  and  pohce  laws.  As  the  obstruction 
is  on  a  large  scale,  the  injustice  is  correspond- 
ingly large.  It  is  a  reasonable  statement  that 
vast  wealth  is  yearly  denied  to  mankind  in  the 
aggregate,  and  to  its  constituent  parts  in  a  meas- 
ure, because  of  the  obstructions  to  the  profitable 
exchange  of  goods  whereby  each  locality  should 
give  its  main  eff'ort  to  those  things  which  are 
produced  with  the  most  profit.  This  injustice  is 
none  the  less  real  and  impoverishing  because  self- 
inflicted  and  general. 

International  justice  makes  for  the  end  of  the 
obstructions  to  international  trade.  It  is  true  that 
this  force  is  at  present  absolutely  unrecognized 


108     THE  PASSING  OF  THE  TARIFF 

by  many  men  who  are  influential  in  shaping  the 
poHcies  of  nations.  But  it  is  none  the  less  a 
living  force.  It  will  grow  stronger  as  the  con- 
science of  mankind  is  quickened  to  a  keener  sense 
of  the  rights  of  individuals  and  of  nations.  It 
will  weigh  more  and  more  heavily  upon  the  judg- 
ment of  men  as  the  intellect  of  the  world  com- 
prehends truths  and  facts  with  more  breadth  and 
exactness.  It  will  continue  to  rise,  like  the  waters 
of  a  flood,  until  it  sweeps  away  the  weakening 
obstructions  and  brings  all  the  nations  to  a  full 
realization  of  their  equality  in  property  rights 
everywhere  upon  the  face  of  the  earth. 


CHAPTER  VIII 

LABOR'S  ALTERED  STATUS 

Within  a  few  years,  comparatively,  the  status 
of  laboring  men  has  altered  materially  as  an  ele- 
ment in  the  contest  over  the  obstructive  tariff. 
When  Webster  was  making  his  unanswerable  ar- 
guments against  a  high  tariff  and,  much  later 
than  that,  when  the  revenue  tariff  champions  of 
the  discussions  after  the  civil  war  were  most  ac- 
tive, laboring  men,  as  a  general  fact  all  over  the 
country,  were  far  less  organized  than  they  are 
today.  Now  they  are  not  only  organized  with 
comparative  thoroughness  and  efficiency,  but  it 
is  recognized  as  desirable,  even  by  employers,  that 
there  should  be  labor  organizations.  So  far  has 
this  development  gone  that  labor  unions  have 
their  legal  standing.  They  are  recognized  forces 
in  the  industrial  situation.  They  have  their  tre- 
mendous strength.  Labor  is  not  the  helpless 
victim  it  was  formerly.  It  is  no  longer  at  the 
mercy  of  tyrannical  employers.  It  is  sturdy, 
vigorous  and  combative.  It  is  abundantly  able 
to  care  for  itself.  It  has  such  organization  and 
strength  that  it  has  no  hesitation,  in  many  in- 
stances, in  plunging  instantly  into  war  with  its 
emploj'^ers,  if  it  believes  that  its  rights  are  out- 
raged, or  that  It  has  an  opportunity  to  better 
itself  financially. 

109 


110     THE  PASSING  OF  THE  TARIFF 

With  this  altered  condition  has  come  about  an 
altered  status,  also,  of  the  public  toward  organ- 
ized labor.  It  is  generally  recognized  that  the 
organization  of  labor  has  put  another  fighting 
force  into  the  field.  Labor  is  now  strong  over 
against  capital.  It  asks  for  no  favors,  but  only 
for  its  rights.  In  demanding  its  rights,  it  dis- 
plays the  same  selfishness  and  inability  to  recog- 
nize rights  on  the  part  of  other  people  as  has 
been  a  marked  characteristic  of  the  treatment  of 
labor  by  capital  in  the  days  when  labor  was  too 
weak  to  fight  its  employers.  Abundant  illus- 
tration of  this  is  seen  in  the  great  strikes  in 
Chicago,  San  Francisco,  Boston,  New  York  and 
other  cities.  Organized  labor  stands  over  against 
organized  capital  as  an  equally  deplorable  illus- 
tration of  selfishness.  It  is  equally  a  predatory 
trust.  It  aims  equally  at  monopoly.  It  is 
equally  in  need  of  reform. 

Capital  and  labor  have  been  the  upper  and  the 
nether  millstones  between  which  the  public  has 
been  ground.  Capital  and  labor  are  equally 
ready  to  tie  up  railroads,  street  railways,  team- 
sters' facilities,  telegraph  service,  or  any  other  in- 
dispensable necessity  to  the  well-being  of  the  pub- 
lic, knowing  that  great  concerns  of  property  and 
life  hang  upon  their  action,  while  they  fight  out 
their  quan'cls  over  pecuniary  differences  whose 
consequences  are  not,  for  a  moment,  to  be  weighed 
against  the  suffering  and  loss  they  cause. 

Consequently  the  appeal  of  labor  to  the  sym- 


LABOR'S  ALTERED  STATUS   111 

pathies  of  the  country  has  already  lost  most  of 
its  force.  Labor  fights.  It  is  not  an  object  of 
pity.  People  all  over  the  country,  wholly  inno- 
cent and  wholly  helpless,  suffer  because  labor 
fights.  They  are  no  longer  disposed  to  sympa- 
thize with  labor  in  its  struggle  against  capital 
because,  in  many  cases,  labor  has  no  rightful 
claim  upon  sympathy.  This  feeling  toward  or- 
ganized labor  will  enter  into  the  contest  over  the 
obstructive  tariff. 

This  element  of  sympathy  with  labor  declin- 
ing in  strength,  therefore,  the  contest  over  ob- 
struction becomes  much  simplified.  Many  peo- 
ple who  believe  that  obstructions  should  be  re- 
moved, have  still  conceded  the  point  that  there 
should  be  a  sufficient  tai'iff  upon  the  manufactures 
in  our  country  to  protect  our  labor  against  the 
competition  of  foreign  labor.  In  the  guberna- 
torial campaign  in  Massachusetts  in  1907,  for  in- 
stance, the  candidate  for  governor  who  made  most 
of  the  issue  of  revenue  refonii  and  of  reciprocity, 
said  publicly  that  he  believed  that  sufficient  tariff 
should  be  retained  to  cover  the  difference  in  cost 
of  labor.  That  is  the  position  taken  by  the  re- 
publican national  platform   of  1908. 

But  this  consideration  will  not  stand  exami- 
nation. Politicians  may  cater  for  the  votes  of 
laboring  men,  but  it  must  be  understood  clearly 
that  such  catering  is  nothing  but  political  expe- 
diency, flattery  and  self-seeking.  At  bottom  the 
question  regarding  any  industry  sheltered  by  ob- 


112     THE  PASSING  OF  THE  TARIFF 

structions  of  imports  is  whether  that  industry  can 
stand  alone  if  the  tariff  is  removed.  Capital  and 
labor  are  upon  the  same  footing  in  the  presence 
of  this  question.  If  the  business  is  unable  to 
stand  on  its  own  merits,  if  it  is  a  bloodsucker 
upon  the  hardworking  people  of  the  country, 
then  its  continuance  has  no  justification.  Capi- 
tal and  labor  engaged  in  it  are  equally  unworthy 
objects  of  sympathy  and  neither  can  justly  stand 
before  the  people  and  demand  that  it  be  sup- 
ported b}'  people  in  other  industries,  because  it  is 
incapable  of  self-support. 

Yet,  in  the  shifting  of  ground  which  friends 
of  favored  industries  have  been  forced  to  take, 
the  argument  of  protection  to  labor  in  the  United 
States  has  come  to  be  probably  the  strongest  re- 
liance of  the  tariff  champions.  In  The  Protec- 
tionist of  December,  1906,  which  can  certainly 
be  taken  as  a  fair  type,  after  the  statement  that 

"  In  Alexander  Hamilton's  time  there  was  little 
or  no  difference  between  British  and  American 
wages,  and  ocean  freights  ranged  from  15  to  25 
per  cent,  of  the  cost  of  the  goods.  For  these  rea- 
sons low  duties  were  sufficient,  and  if  the  same  con- 
ditions had  continued,  protection  might  after  a  few 
years  have  been  dispensed  with," 

follows  this  passage : 

"  Wages  in  this  country  are  now  25  per  cent,  higher 
than  in  Great  Britain,  30  per  cent,   higher  than  in 


LABOR'S  ALTERED  STATUS       113 

France,  40  per  cent,  higher  than  in  Belgium  and 
Germany,  and  50  to  70  per  cent,  higher  than  in 
other  Europe  and  in  Japan,  while  ocean  freights 
are  not  one-tenth  wliat  they  were.  These  two  facts 
make  protection  to  established  industries  quite  as 
necessary  now  as  it  was  to  young  industries  then. 
Any  tariff  argument  which  does  not  recognize  this 
is  so  antiquated  and  unprogressive  that  it  must  be 
regarded  as  uneconomic  and  unpatriotic." 

As  a  fact  of  history,  wages  in  this  country, 
even  in  revolutionary  times,  were  higher  than  in 
England  and  have  always  been  higher.  Now  the 
very  fact  that  wages  are  higher  here  than  abroad 
is  due  to  the  greater  value  of  labor,  and  the 
higher  its  value  the  less  it  has  to  fear  from  com- 
petition of  cheap  labor,  for  it  is  one  of  the  es- 
tablished facts  of  employment  that  low-priced 
labor  is  the  most  expensive  when  measured  by 
product  and  the  highest  priced  is  the  cheapest. 
The  protectionist  argument,  therefore,  is  that  the 
less  protection  that  labor  needs,  the  more  we  must 
give  it.  To  that  inconsistency  is  a  candid  and 
consistent  tariff  man  forced  by  the  discord  of  his 
doctrines. 

If  capital  invested  in  unprofitable  enterprises 
cannot  rightfully  demand  dividends  at  the  ex- 
pense of  the  public,  no  more  can  the  labor  em- 
ployed in  the  production  demand  continuation  of 
its  employment.  Both  fall  equally  under  con- 
demnation. Profit  would  result  to  the  country 
from    discontinuing   the    enterprise   entirely    and 


114?     THE  PASSING  OF  THE  TARIFF 

preventing  further  drain  upon  the  resources  of 
the  people  in  supporting  a  business  which  cannot 
support  itself. 

If  the  obstruction  to  imports  is  based  upon  the 
theory  of  charity,  then  let  it  be  so  stated  and 
clearly  understood.  If  the  employees  in  an  in- 
dustry which  cannot  support  itself  are  given  em- 
ployment at  the  expense,  in  part,  of  the  public, 
then  they  are  paupers  to  that  degree  just  as  tinjly 
as  those  who  are  put  into  public  institutions. 
What  makes  the  case  for  them  all  the  worse  is 
that  those  who  defend  the  system  apparently  de- 
mand that  employees  be  supported  in  this  pau- 
perism, in  spite  of  the  fact  that  they  are  capable 
of  earning  a  competent  livelihood  in  profitable  in- 
dustries, and  would  be  so  engaged  if  they  were 
not  established  in  situations  where  they  cannot 
return  to  the  public  as  much  as  they  cost  the 
public.  It  is  a  fair  tribute  to  give  to  labor  that 
it  will  not  persist  in  holding  such  a  dishonorable 
and  discreditable  position  when  the  truth  is 
clearly  demonstrated,  as  it  surely  Avill  be  by  the 
progress  of  events. 

But  the  strong  organization  of  labor  has  fur- 
ther consequences  than  the  alienation  of  popular 
sympathy.  Here  is  the  prime  fact  of  the  situa- 
tion all  over  the  United  States  in  consequence  of 
this  organization,  that  labor  is  in  touch  with  it- 
self to  a  large  degree.  It  is  acquiring  the  habit 
of  acting  in  unity,  or,  at  least,  by  majorities. 
Sympathetic   strikes  reveal  the   fraternal  feeling 


LABOR'S  ALTERED  STATUS      115 

which  prevails  throughout  labor  organizations  as 
against  capital.  Now,  add  to  this  approximate 
unity  of  organized  labor  the  fact  that  by  far  the 
large  majority  of  labor  is  not  in  the  employ  of 
the  protected  industries.  While  it  is  true  that 
the  employees  of  industries  which  are  favored  by 
the  tariff  are  compactly  organized,  as  a  rule,  yet 
it  is  furthermore  true  that  tlie  extension  of  or- 
ganization brings  in  constantly  more  and  more 
of  the  wage-earners  of  the  country  who  are  not 
employed  by  industries  which  have  a  nominal  tar- 
iff shelter. 

Direct  personal  interest,  therefore,  will  lead  the 
working  people,  as  a  rule,  who  must  pay  the  taxes 
caused  by  the  obstruction  of  trade  and  who  re- 
ceive no  visible  compensation  in  way  of  personal 
employment,  to  unite  for  the  defeat  of  the  ob- 
struction system.  From  their  point  of  view,  in 
the  long  run,  it  is  for  their  interest  that  the 
duties  should  be  reduced  or  removed.  It  is  true 
that  a  considerable  number  of  their  fellow  work- 
ers are  employed  by  favored  industries,  and  self- 
sacrifice  might  be  construed  to  demand  that  they 
stand  by  such  employees.  But  the  issue  is  not 
temporary,  but  permanent,  involving  the  indefi- 
nite future,  and  there  is  to  be  balanced  the  wel- 
fare of  the  majority  against  that  of  the  minority. 
It  is  pertinent  to  turn  the  status  the  other  end 
around  and  say  that  the  duty  of  self-sacrifice 
is  more  incumbent  upon  the  minority  toward  the 
majority    than   upon    the    majority    toward    the 


116      THE  PASSING  OF  THE  TARIFF 

minority.  As  far  as  organization,  therefore,  af- 
fects the  popular  vote,  it  will  tend  to  increase  the 
opposition  to  the  tariff.  As  far  as  the  duty  or 
lo^-altj^  to  the  organization  is  ignored,  the  effect 
will  still  be  to  increase  the  vote  against  the  tariff, 
because  a  majorit}'  of  the  employees  have  a  direct 
personal  interest  against  a  high  tariff  and  be- 
cause there  has  been  a  mateinal  destruction  of  the 
sympathy  with  the  employees  of  favored  interests. 
But  the  altered  status  due  to  the  organization 
of  labor  may  work  much  more  powerfully  yet 
against  the  favored  industries.  It  is  a  pertinent 
fact  of  the  situation,  as  far  as  the  employees  of 
the  favored  industries  are  concerned,  that  they 
do  not  get  higher  wages  than  are  warranted  by 
the  general  conditions  of  the  country,  taking 
all  the  states  into  consideration,  with  the  highly 
significant  fact  that  there  is  absolute  free  trade 
between  them.  These  employees  get  their  living 
under  the  general  standard  of  wages.  They  are 
not  a  favored  class,  as  the  capital  which  em- 
ploys them  is  favored.  They  must  stand  their 
chances  in  the  stonn  and  stress  of  business,  the 
same  as  other  employees.  They  are  exposed  to 
foreign  competition  in  a  fonn  to  which  the  capital 
which  emplo^^s  them  is  not  exposed.  Foreign  labor 
is  constantly  coming  to  this  country  to  compete 
with  them.  It  is  true  that  we  have  laws  against 
the  importation  of  contract  labor,  and  that  we 
exclude  many  Asiatics  who  would  be  glad  to  come. 
But   it   is  well  known   that  workers  by  hundreds 


LABOR'S  ALTERED  STATUS      117 

of  thousands  come  to  this  country  every  year  to 
work  and  earn  an  honest  living  under  the  favora- 
ble conditions  of  the  United  States.  (There  is 
a  point  to  be  made  regarding  the  return  of  such 
labor  during  hard  times,  illustrating  the  mobility 
of  labor.)  Wage-earners  in  the  United  States 
are  constantly  experiencing  the  consequences  of 
this  steady  importation  of  competing  labor. 
Aside  from  the  fact,  in  the  favored  industries, 
therefore,  that  employment  is  had  under  the  cur- 
rent conditions  of  the  country,  there  is  no  special 
advantage  to  the  employees  of  favored  industries 
over  the  employees  of  other  industries.  All  are 
on  the  same  general  wage  scale. 

This  being  so,  owing  to  the  inevitable  fact  that 
there  is  no  prevention,  under  the  very  terms  of 
American  liberty  and  freedom,  of  constant  im- 
ports of  foreign  competing  labor,  the  employees 
of  the  favored  industries  are  under  the  burdens  of 
the  tariff  to  as  full  an  extent  as  all  other  portions 
of  the  people,  and  they  have  no  exemption  what- 
ever owing  to  employment  by  favored  industries. 
They  merely  get  their  living  and  save  what  they 
can,  just  like  wage-earners  in  other  industries. 

Self-interest,  therefore,  for  all  wage-earners, 
whether  employed  in  the  favored  industries  or 
outside  of  them,  demands,  as  a  measure  of  benefit 
to  all  the  employees  in  the  country  alike,  that 
the  tariff  be  removed.  Now  here  comes  in  the 
tremendous  consequence  of  the  altered  labor 
status  by  means  of  strong  and  extensive  organi- 


118      THE  PASSING  OF  THE  TARIFF 

zation.  It  is  quite  possible,  as  one  of  the  con- 
sequences of  popular  agitation,  in  no  distant  fu- 
ture, that  the  entire  body  of  organized  labor  in 
the  country,  both  that  employed  by  the  favored 
industries  and  the  larger  number  otherwise  em- 
ployed, will  enlist  in  a  campaign  against  the  ob- 
structive tariff.  It  would  not  be  sti'ange  to  see 
organized  labor  make  this  the  prime  issue  of  a 
presidential  campaign  and,  for  the  welfare  of  em- 
ployees of  every  class  all  over  the  country,  de- 
mand that  the  obstructions  to  trade  be  removed 
in  order  that  the  legitimate  advantages  of  low- 
priced  production  be  enjoj'ed  as  widely  as  possi- 
ble in  every  comer  of  the  United  States.  Self- 
interest  demands  such  action.  Loj'alty  to  fel- 
low wage-earners  demands  it,  if  that  principle  is  to 
be  appealed  to  as  a  motive  of  political  action. 
Labor  is  learning  to  act  together  more  than  ever. 
It  is  to  be  presumed  that  it  is  gaining  in  intelli- 
gence as  it  advances  in  age  of  organization.  Ob- 
struction of  trade  cannot  reasonably  expect  that 
it  can  hold  the  labor  vote  as  it  has  held  it  hitherto. 
But  the  case  is  not  all  in  yet.  One  of  the 
commonplaces  which  is  gradually  being  accepted 
as  true,  in  spite  of  constant  kicking  against  it  by 
one  side  or  the  other,  or  both,  is  that  the  in- 
terests of  labor  and  capital  are  identical.  In 
its  proper  place  the  reasoning  which  follows  will 
be  applied  to  capital.  Here  it  is  applied  to  labor. 
It  is  based  upon  the  bad  consequences  to  busi- 
ness of  presidential  campaigns.     Very  likely  the 


LABOR'S  ALTERED  STATUS      119 

apprehension  of  trouble  frequently  outweighs 
the  real  damage,  but  it  is  a  chronic  complaint 
that  business  suffers  during  every  presidential 
campaign.  What  makes  it  suffer?  Because 
legislation  is  feared  in  consequence  of  the  success 
of  one  or  the  other  of  the  parties.  Now,  as  a 
matter  of  fact,  this  apprehension  is  almost  always 
based  upon  one  or  the  other  of  twO'  things,  either 
that  there  will  be  changes  attempted  in  the  tariff, 
or  changes  attempted  in  the  currency  laws.  The 
latter  subject  is  not  under  discussion  here.  But, 
regarding  the  tariff,  it  is  the  truth  that  in  almost 
every  presidential  election,  nominally  or  really, 
the  tariff  is  a  cause  of  apprehension.  Favored 
industries  dread  any  possible  change.  Now,  our 
country  is  old  enough,  and  we  have  had  presi- 
dential elections  enough  —  seeing  that  we  have 
had  a  tariff  ever  since  we  have  had  the  present 
system  of  Congress  —  to  make  it  certain  that  as 
long  as  we  have  favored  industries,  there  will  be 
attacks  upon  that  favoritism.  The  issue  is 
chronic  and  will  not  be  settled  until  it  is  settled  so 
nearly  right  that  no  political  party  will  take  it 
up  as  a  campaign  issue.  This  great  and  per- 
sistent vitality  of  the  issue  is  of  itself  demon- 
stration that  the  issue  is  not  settled  right,  or  that 
a  very  large  number  of  our  people  are  not  in- 
telligent. But  the  general  reputation  for  intelli- 
gence on  the  part  of  the  dissatisfied,  compared 
with  the  others,  does  not  warrant  the  conclusion 
that  the   intelligence   of  the   country   is   concen- 


ISCr    THE  PASSING  OF  THE  TARIFF 

trated  solely  upon  the  side  which  has  a  direct 
financial  gain  to  make  out  of  government  favorit- 
ism. 

Now,  business  disturbances  due  to  politics  are 
unfortunate.  If  employment  of  labor  is  threat- 
ened, if  wage-standards  are  lowered,  if  the  future 
is  gloomy  and  uncertain,  if  it  is  impossible  to 
plan  for  the  keeping  of  the  home,  for  the  educa- 
tion of  the  children,  for  the  continuance  of  the 
present  system  of  running  the  household  by  rea- 
son of  doubt  whether  a  particular  party  will  elect 
its  president,  then,  if  that  doubt  could  be  re- 
moved, so  much  would  be  added  to  the  material 
content  and  betterment  of  labor.  It  would  be 
well  if  there  were  no  Damocles  sword  hanging 
over  the  bread-winner's  head  because  of  the  elec- 
tion. It  would  remove  the  peril,  once  every  four 
years,  of  a  break-up  of  the  home,  of  removal  to 
other  quarters  and  of  interruption  of  the  settled 
course  of  earning  and  reaping  the  fruits  of  the 
earnings,  if  the  tariff  were  taken  out  of  politics. 
This  is  the  stake  which  labor  has,  wholly  aside 
aside  from  the  great  gain  to  be  secured  by  the 
removal  of  obstructions  to  legitimate  exchanges  of 
goods  and  by  the  reduced  cost  of  government 
when  the  obstruction-expense  shall  have  been  re- 
moved. 

Again,  labor  has  gains  to  make  in  the  removal 
of  obstructions  because  the  development  of  inter- 
national intercourse  has  brought  all  the  world 
closer  together  and  if  there  were  no  obstructions 


LABOR'S  ALTERED  STATUS       121 

other  than  those  imposed  by  natural  conditions, 
then  all  the  world  would  be  brought  under  contri- 
bution to  any  particular  part  and  shortage  of  sup- 
plies in  any  locality  by  failure  of  crops,  or  war  or 
other  disaster  could  be  made  up,  at  least  in  part, 
by  contributions  drawn  from  the  next  most  fa- 
vorable source  of  supply.  Not  only  would  capi- 
tal gain  because  its  manufacturing  could  proceed 
without  material  intenniption,  but  labor  would 
gain  because  its  employment  would  not  be  cut  off. 
The  wider  the  profitable  source  of  supply,  the 
less  likely  is  the  industry  to  interruptions  for 
want  of  raw  material  and  therefore  the  more 
Hkely  is  labor  to  enjoy  continuous  employment. 
Here,  again,  labor  has  to  gain  by  removal  of  ob- 
structions and  the  organization  of  labor  makes 
it  more  probable  than  ever  that  the  entire  strength 
of  the  organization  will  be  put  forth  to  secure 
the  establishment  of  new  conditions  by  the  gov- 
ernment whereby  present  tariff  obstructions  to 
the  securing  of  a  wide  source  of  supply  of  raw 
material  will  be  removed. 

Improved  means  of  transportation  and  of  com- 
munication all  over  the  world  have  made  it  possi- 
ble for  poorly  paid  labor  to  learn  more  quickly 
than  ever  before  where  there  is  better  employ- 
ment and  to  migrate  to  it.  Certainly  much 
money  is  sent  from  this  country  by  immigrants 
to  bring  their  friends  over  and  the  mobility  of 
labor  has  because  an  established  fact,  strikingly 
illustrated  by  the  immediate  return  to  Europe  of 


122     THE  PASSING  OF  THE  TARIFF 

scores  of  thousands  of  workers  after  the  begin- 
ning of  the  depression  of  October,  1907.  For 
labor's  benefit,  the  only  equivalent  offset  to  this 
mobility  is  an  equal  mobility  of  goods  so  tliat 
labor  may  reap  the  benefit  of  profitable  ex- 
changes between  countries. 

Labor's  altered  status  reveals  a  new  source  of 
strength  in  organization,  and  that  is  in  the  labor 
publications.  The  difference  from  former  days 
is  prodigious.  Labor  publications  unheard  of 
by  the  miscellaneous  public  outside  of  this  field 
have  a  wide  circulation.  Labor  doctrines  are 
spread  by  labor  journals.  Employees  are 
brought  in  touch  with  each  other  as  never  be- 
fore. They  reach  a  common  understanding  bet- 
ter than  ever  before.  They  have  facilities  for 
concerted  action  never  before  enjoyed.  All 
these  means  are  actively  employed  in  political 
campaigns  and  they  contribute  powerfully  to  the 
solid  massing  of  the  labor  strength.  Taking  the 
entire  labor  field  together,  there  is  no  doubt 
that  the  forces  of  the  new  tariff  era  are  felt  hei'e 
strongly  also,  nor  that  they  will  act  for  the  re- 
moval of  the  tariff  obstruction. 


CHAPTER  IX 
CAPITAL'S  ALTERED  STATUS 

In  this  new  era  of  tariff  conditions,  capital's 
status  has  altered  as  truly  as  labor's.  At  the  be- 
ginning of  our  national  experiment  in  obstiaicting 
trade  in  order  to  increase  national  prosperity, 
not  nearly  as  many  opportunities  were  open  to 
capital  for  profitable  employment  as  there  are 
now,  and  not  nearly  as  much  capital  relatively 
was  available  for  the  development  of  the  coun- 
try's industries  and  opportunities  as  there  is  now. 
While  it  is  certainly  true  that  the  country's  po- 
tentialities and  natural  gifts  were  as  abundant  as 
they  are  today,  yet  the  crude  state  of  develop- 
ment made  it  none  the  less  true  that  for  capital- 
ists of  that  day  there  were  not  as  many  practical 
openings  for  investment,  promising  quick  and 
sure  returns,  as  there  are  today. 

Now,  the  correct  status  of  capital,  and  also 
that  of  labor,  in  this  or  in  any  other  country,  can- 
not be  comprehended  unless  it  be  realized  what 
an  insatiable  demand  there  is  for  good  things  on 
the  part  of  all  normal  persons.  Human  desires 
outrun  by  far  the  most  talented  ability  to  supply 
them.  That  is  a  commonplace  which  has  a  very 
important  part  in  reaching  a  fair  judgment  re- 
garding the  employment  of  capital  and  labor. 

In  a  nation  with  the  brains,  tastes  and  needs  of 
123 


124     THE  PASSING  OF  THE  TARIFF 

ours,  human  ingenuity  in  formulating  new  de- 
mands always  outruns  the  abilit}^  of  human  hands 
and  machinery  to  keep  up.  Men  see  genuine 
opportunities  always  ahead  of  them  for  making 
money  far  in  excess  of  their  ability  to  improve 
them.  This  is  the  chronic  condition  of  affairs. 
Doors  are  open  on  every  hand  for  profitable 
employment  of  capital.  This  means,  too,  the 
profitable  employment  of  labor.  That  is,  in  the 
normal,  healthful  condition  of  this  or  of  any 
other  country  there  is  a  chronic  shortage  of  cap- 
ital and  labor.  Brains-  go  ahead  faster  than 
hands  can  keep  up,  and  this  will  always  be  the 
case  when  business  is  normal. 

Exceptions  occur  when  crops  fail  or  other  dis- 
asters overtake  the  people.  Too  many  hands  for 
the  work  that  can  be  paid  for  is  the  record  of 
many  a  period  of  hard  times.  Too  much  capi- 
tal seeking  investment  to  yield  a  satisfactory 
profit  is  equally  a  matter  of  record.  But  it  is 
for  the  reproof  of  men  that,  in  our  country,  at 
least,  the  sharpest  financial  crises,  the  greatest 
suffering  of  unemployed  labor,  and  the  idleness 
of  uninvested  capital,  or  the  low  rates  of  interest 
on  capital,  are  due  to  human  errors,  blunders  and 
wilful  defiance  of  sufficient  warnings,  rather  than 
to  any  severe  calamity  from  natural  causes. 

In  the  United  States,  at  this  day  and  as  far 
in  the  future  as  we  can  forecast  the  outcome  of 
industrial  and  financial  forces,  capital  will  have 
permanent    opportunity   for    profitable    employ- 


CAPITAL'S  ALTERED  STATUS     il25 

ment,  and  that  means  profitable  employment  for 
labor  also.  Let  the  mind  run  over  a  few  of  the 
principal  fields  of  investment.  They  open  wide 
fields  for  the  employment  of  money,  and  they  re- 
veal imperative  conditions  of  activity. 

For  instance,  the  national  domain  of  agricul- 
ture offers  better  inducement  for  capital  than 
ever.  As  long  as  people  must  eat  and  as  long 
they  must  pay  market  prices  in  order  to  escape 
starvation,  there  will  be  a  market  for  farm  prod- 
ucts. Our  immense  resources  in  the  West  have 
hardly  been  touched,  when  we  consider  the  re- 
clamation of  the  arid  regions,  and  the  expansive 
irrigation  projects  which  promise  to  pour  wealth 
upon  the  country  as  water  is  poured  upon  the  re- 
ceptive fields.  Farm  and  orchard  crops  are  prom- 
ised in  luxuriance  where  formerly  nothing  eatable 
grew  and  where  men  could  not  live.  Our  great 
centers  of  population  all  over  the  country  de- 
mand more  than  ever  the  employment  of  immense 
capital  in  market  gardening,  where  returns  are 
adequate  for  a  comfortable  livelihood  and  are 
sure.  Farming  tools  of  many  new  devices  and 
farmers'  co-operation  make  farming  a  very  dif- 
ferent occupation  from  the  farming  of  the  prev- 
ious generation  and  great  demands  are  made  upon 
capital  to  cultivate  this  field. 

As  an  illustration  of  the  forward  march  in 
agriculture, —  a  comparatively  small  matter  in 
this  field  alone, —  let  quotation  be  made  of  the 
following  in  an  article  by  Frederick  W.  Ford  in 


126     THE  PASSING  OF  THE  TARIFF 

the  Boston  Transcript  of  December  21,  1907, 
being  the  seventh  in  a  series  entitled  "  Roose- 
velt's Land  Policy."  It  is  nothing  against  the 
point  made  that  this  work  Is  done  under  govern- 
ment auspices,  for  it  Is  none  the  less  done  by  the 
people,  and  will  no  less  make  demands  upon  the 
capital  of  the  country,  though  the  burden  be  in 
the  forai  of  taxes.  Strength,  indeed,  is  given  to 
the  argument,  because  this  pioneer  work  by  the 
government  is  only  the  preliminary  to  further  In- 
vestment by  private  capital  In  large  amounts. 
]\Iultiply  these  open  doors  by  the  hundred,  if 
you  would  realize  the  demand  made  for  new  cap- 
ital In  agriculture  alone,  a  demand  which  offers 
promise  of  profit  so  large  as  to  attract  its  share 
of  capital  away  from  manufacturing,  mining,  or 
commerce.     The  quotation  is  as  follows : 

Clarence  J.  Blanchard,  statistician  of  the  Recla- 
mation Service,  estimates  that  the  twenty-five  irri- 
gation projects  now  under  construction  by  the  serv- 
ice eventually  will  add  3,198,000  acres  to  the  agri- 
cultural lands  of  the  country,  though  as  at  present 
developed  the  projects  will  take  care  of  but  1,598,- 
000  acres.  Thirteen  other  projects  which  have  been 
favorably  passed  upon  and  are  awaiting  funds  with 
which  to  carry  them  out  will  give  3,270,000  acres 
more  to  the  farmer;  a  total  of  6,468,000  acres.  At 
a  low  estimate  this  land  will  be  worth  $323,400,000. 
The  total  increment  from  the  sale  of  irrigated  land 
in  1905-6  was  $5,166,336,  giving  a  total  reclamation 
fund  of  $33,242,444.      The  estimated  increment  in 


CAPITAL'S  ALTERED  STATUS     127 

1907-8  is  $8,338,159;  this  will  give  a  total  fund  of 
$41,580,584.  When  this  has  been  expended,  1,- 
400,000    acres    will    have   been    reclaimed    and   will 

begin  to  return  annually  $4,000,000  to  the  fund. 

The  following  table  gives  the  names  of  the  dif- 
ferent projects,  the  acreage  of  land  reclaimed  under 
the  pr^esent  plans,  and  the  estimated  cost: 

Estimated  Irrigable 

Project.                                                        Cost.  Acreage. 

Salt   River,    Arizona $5,300,000  200,000 

Yuma,  California-Arizona 3,500,000  100,000 

Uncompahgre,  Colorado 5,200,000  150,000 

Minidoka,  Idaho   1,800,000  80,000 

Payette-Boise,  Idaho   1,605,000  120,000 

Garden  City,   Kansas 260,000  8,000 

Milk  River,  Montana 1,500,000  40,000 

Huntley,  Montana   900,000  33,000 

Sun  River,  Montana 500,000  16,000 

North  Platte,  Neb.-Wyo 4,100,000  110,000 

Truckee-Carson,   Nevada 4,000,000  200,000 

Hondo,  New  Mexico 336,000  10,000 

Calsbad,  New  Mexico 600,000  20,000 

Rio  Grande,  New  Mexico 200,000  15,000 

Lower    Yellowstone,    Montana-North 

Dakota    2,700,000  60,000 

Buford-Trenton,    Williston,    Nesson, 

North  Dakota 1,270,000  40,000 

Klamath,    Oregon-California 2,400,000  50,000 

Umatilla,    Oregon 1,100,000  18,000 

Belle  Fourche,  South  Dakota 3,000,000  100,000 

Strawberry   Valley,   Utah 1,850,000  35,000 

Okanogan,  Washington 500,000  9,000 

Tieton,  Washington 1,400,000  24,000 

Sunnyside,  Washington 2,000,000  40,000 

Wapato,  Washington 600,000  20,000 

Shoshone,  Wyoming 3,500,000  100,000 

Total    $50,121,000  1,598,000 


128     THE  PASSING  OF  THE  TARIFF 

The  projects  which  are  awaiting  funds  for  carry- 
ing out  follow: 

Estimated  Probable 

Projects.  Cost.  Acreage. 

Little  Colorado,  Arizona $4,000,000  80,000 

Sacramento  Valley,  Cal 20,000,000  500,000 

San  Joaquin  Valley,  Cal 6,000,000  200,000 

Colorado     River,     Colorado,     Utah, 

California,  Arizona 40,000,000  750,000 

Dubois,  Idaho   4,000,000  100,000 

Lake  Basin,  Montana 12,000,000  300,000 

Las  Vegas,  New  Mexico 1,500,000  35,000 

Urton  Lake,  New  Mexico 2,000,000  35,000 

Walker  &  Humboldt  Rivers,  Nevada  15,000,000  500,000 

Red  River,  Oklahoma 4,000,000  100,000 

John  Day  River,  Oregon 10,000,000  200,000 

Weber,  Utah 5,000,000  100,000 

Priest  Rapids,  Washington 2,000,000  50,000 

Goshen  Hole,  Wyoming 4,000,000  120,000 

Total  $129,500,000     3,270,000 

Intelligent  forestry  Is  just  beginning  to  make 
the  acquaintaince  of  the  financiers  of  the  country. 
From  the  mountains  of  New  England  to  the  slopes 
of  the  Pacific  coast  there  are  broad  expanses 
which  today  tempt  capital  with  a  reasonable  and 
rich  promise  of  reward  for  proper  care  of  forests 
already  standing,  while  other  seductive  pictures 
are  drawn  by  scientific  experts  of  the  riches  to 
follow  the  planting  of  new  forests.  The  United 
States  has  already  unquestionable  stores  of  wealth 
in  this  field,  and  urgent  demands  upon  capital  are 
already  made.  We  are  today  far  behind  our  op- 
portunities,   or   even    our   plain    forestry    duties, 


CAPITAL'S  ALTERED  STATUS     129 

and  professional  foresters  can  easily  show  where 
capital  can  make  large  returns. 

Manufacturing  must  have  vast  amounts  of  cap- 
ital for  its  development.  Peace  men  are  con- 
stantly holding  up  the  spectacle  of  strong  war- 
ships consigned  to  the  scrap  heap  of  old  iron 
because  they  have  become  antiquated  as  a  costly 
object  lesson  upon  the  cost  of  war,  but  the  com- 
petition in  the  industrial  contest  is  even  more  se- 
vere than  in  the  naval.  Men  are  constantly  plan- 
ning and  working  how  to  make  money,  even  more 
diligently  than  they  plan  and  work  how  to  out- 
class their  opponents  in  military  and  naval  offense 
and  defense.  ]\Ianufacturing  machinery  be- 
comes antiquated  and  unprofitable  with  even  more 
rapidity  than  battleships.  Economy  of  produc- 
tion and  ability  to  meet  competition  compel  the 
manufacturer  to  renew  his  machinery  long  before 
it  is  worn  out.  For  this  renewal,  who  can  tell 
how  many  millions  of  capital  must  be  set  aside  an- 
nually.'' Ten  per  cent,  of  the  cost  of  the  plant 
is  a  standard  many  establishments  set  apart  an- 
nually for  depreciation.  IMultiply  the  manufac- 
turing capital  by  that  and  see  what  the  steady 
demand  is  for  investment. 

Natural  resources  for  manufacturing  must  be 
developed,  as  well  as  old  machinery  be  replaced. 
Electric  power  has  given  a  new  value  to  water 
powers  far  and  near.  Countless  opportunities 
wait  to  be  improved,  reminding  one  of  the  lines 
of  Birdofredum  Sawin : 


130     THE  PASSING  OF  THE  TARIFF 

"  Ware  millsites  filled  the  country  up, 
Ez  thick  ez  you  could  cram  'em ; 

An'  desput  rivers  run  about, 
A-beggin'  folks  to  dam  'em." 

Thousands  of  these  sources  of  power  lie  amid 
our  mountains  and  hills  wherever  nature  has 
raised  her  precipitous  areas  suitable  for  the  stor- 
age of  the  powerful  waters. 

Mining  has  its  modem  triumphs,  its  new  meth- 
ods, its  profitable  working  of  ores  formerh'^  un- 
workable with  profit.  Beneath  the  surface  of  the 
earth  are  countless  millions  of  valuable  stores, 
waiting  to  be  developed  and  already  promising 
abundant  reward  for  the  money  which  shall  be 
invested  in  them,  and  there  has  never  yet  been 
a  hint  that  our  resources  are  so  nearly  exhausted 
that  we  need  retard  in  the  slightest  the  rate  of  our 
development  of  our  mineral  fields. 

Building  will  make  enormous  demands  upon 
capital  in  the  near  future,  and  it  will  be  a  profit- 
able investment.  Modem  methods  make  build- 
ings antiquated  long  before  they  pass  beyond  the 
usable  stage.  Take  the  case  of  Boston.  In  the 
district  covered  by  the  buildings  erected  after  the 
great  fire  of  1872,  many  business  blocks  have  al- 
ready been  demolished  to  make  way  for  others 
which  will  satisfy  the  demand  for  modem  equip- 
ment and  will  yield  larger  return.  Yet  the  build- 
ings  demolished  were  nowhere  near  the  end  of 


CAPITAL'S  ALTERED  STATUS     131 

their  serviceability  by  former  standards.  If  the 
business  portions  of  the  cities  of  the  United 
States,  and  of  the  large  towns,  to  say  nothing 
of  residences,  must  be  reconstructed  with  new  busi- 
ness blocks,  so  that  twenty-five  years  hence  those 
erected  twenty-five  to  thirty-five  years  ago  shall 
have  been  replaced,  to  a  material  degree,  then 
here,  again,  is  a  demand  for  an  inconceivably 
large  amount  of  capital. 

Transportation  promises  to  make  its  demands 
upon  the  men  with  money  to  invest.  See  what 
has  been  done  within  the  last  generation  for  steam 
roads,  for  electrics,  for  steam  transportation  on 
the  water.  Add  to  that  the  annual  increase  de- 
manded by  the  country,  and  conceive,  if  the  mind 
can  comprehend  it,  the  millions  annually  which 
will  be  required  to  keep  our  transportation  inter- 
ests abreast  of  the  demands  of  the  times.  Leslie 
M.  Shaw,  secretary  of  the  treasury,  said  in  his 
speech  at  the  Harvard  Union,  January  14,  1907: 

"  The  railroads  need  more  tracks.  I  was  talking 
with  a  brilliant  railroad  man  the  other  day,  and  he 
figured  out  that  we  needed  70,000  miles  more  track, 
including  terminals,  without  any  extension  of  the 
roads,  in  order  to  carry  our  freight.  ...  It 
would  take  $1,000,000,000  a  year  for  five  years  to 
put  down  that  70,000  miles  of  track  to  carry  the 
freight  in  hand,  without  increasing  our  freight  a 
ton.  It  would  take  to  put  down  this  extra  track 
2,000,000  tons  a  year  of  steel  rails.     The  steel  rail 


132      THE  PASSING  OF  THE  TARIFF 

factories  produce  3,000,000  tons  a  year.  That 
would  leave  only  1,000,000  tons  for  repairing  tracks 
already  laid." 

A  press  dispatch  from  Baltimore,  dated  Jan- 
uary 1,  1908,  gives  the  following  bird's  eye  view 
of  a  comparatively  small  part  of  our  resources 
wliich  demand  the  investment  of  capital,  while 
the  enoiTTious  annual  output  already  attained 
illustrates  the  profitable  opportunities  at  home, 
and  the  whole  recalls  forcibly  to  mind,  if  any 
one  has  the  memory  which  goes  back  as  far,  the 
vociferous  clamor  for  "  expansion  "  with  which 
the  people  of  the  United  States  rushed  forward 
to  the  conquest  of  the  Philippine  islands : 

In  a  broad  survey  of  the  unlimited  possibilities  of 
the  United  States,  with  its  area  of  3,000,000  square 
miles  easily  capable  of  supporting  a  population  of 
more  than  500,000,000  without  crowding,  the  Manu- 
facturers' Record  in  its  special  first  of  the  year  is- 
sue says: 

"  All  Europe  has  42,800  square  miles  of  coal 
area;  the  United  States  has  340,000.  Great  Britain, 
Germany  and  France  have  only  14,400  square  miles 
of  coal.  West  Virginia  has  more  than  these  three, 
and  so  has  Kentucky.  The  South  has  more  than 
four  times  as  much,  and  the  United  States  25  times 
as  much. 

"  We  already  make  about  as  much  iron  as  Great 
Britain,  Germany  and  France  combined.  In  this 
country  we  have,  according  to  the  reports  of  the 
United  States  geological  survey,  of  known  ores  12,- 


CAPITAL'S  ALTERED  STATUS     133 

000,000,000  tons,  or  largely  more  than  all  Europe. 
Granted  that  other  sources  of  supply  will  be  found 
in  other  lands  it  is  quite  possible  that  such  discover- 
ies will  be  fully  matched  by  discoveries  yet  to  be 
made  in  this  country.  The  United  States  geological 
survey  credits  the  Lake  Superior  region  with  1,- 
500,000,000  to  2,000,000,000  tons,  and  the  South 
with  over  10,000,000,000  tons. 

"  Stronger  today  than  ever  before  is  the  South's 
monopoly  of  the  world's  cotton  trade.  We  are  rais- 
ing an  average  of  about  12,000,000  to  12,500,000 
bales  of  cotton  a  year.  We  could  double  that  by 
better  cultivation  and  the  better  selection  of  seed. 
If  the  world  should  eventually  need,  as  in  all  proba- 
bility it  will,  40,000,000  or  50,000,000  bales  from 
the  South,  this  section  will  be  able  to  supply  it,  pro- 
viding the  labor  can  be  secured  to  produce  it. 

"If  the  coal  in  the  state  of  West  Virginia  could 
be  capitalized  at  10  cents  a  ton,  the  total  capitalized 
wealth  of  the  coal  of  that  one  state  would  be  $10,- 
000,000,000.  We  have  oil  enough  to  light  the  world ; 
natural  gas  sufficient  to  run  many  thousands  of  fac- 
tories and  furnish  heat  to  many  millions  of  inhab- 
itants. We  dominate  the  sulphur  trade  of  the 
world.  Tennessee  and  Florida  have  more  phosphate 
rock  than  is  known  of  elsewhere  in  all  the  world. 
Montana  and  other  states  produce  a  very  large  pro- 
portion of  the  world's  copper. 

"  We  have  85,000,000  population  against  Eu- 
rope's 400,000,000;  we  have  a  cotton  crop  worth 
annually  $800,000,000,  while  Europe  has  none;  we 
have  wheat  and  corn  averaging  annually  about  3,- 
400,000,000  bushels,  against  Europe's  2,200,000,000 
bushels;  we  have  225,000  miles  of  railroads,  against 


134      THE  PASSING  OF  THE  TARIFF 

195,000  miles  for  all  of  Europe;  we  are  making 
almost  as  much  pig  iron  as  Europe,  and  mining  over 
60  per  cent,  as  much  coal. 

"  Between  1870  and  1907  the  value  of  farm 
products  has  risen  from  less  than  $2,000,000,000  to 
$7,400,000,000.  The  total  number  engaged  in  agri- 
culture in  1870  was  5,992,000  and  the  total  number 
at  present  is  11,500,000. 

"  Tlie  value  of  all  manufactured  products,  which 
in  1870  was  $4,232,000,000,  is  now  running  at  the 
rate  of  over  $17,000,000,000  a  year,  the  aggregate 
of  manufacturing  products  and  mineral  output  be- 
ing nearly  $19,000,000,000.  This  gives  us  a  total 
of  agriculture,  minerals  and  manufactures  of  con- 
siderably over  $26,000,000,000,  against  $15,000,- 
000,000  in  1900  and  $12,400,000,000  in  1890." 

So  the  enumeration  might  proceed,  showing  the 
vast  openings  and  the  urgent  necessities,  by  land 
and  by  sea,  for  new  capital  to  replace  the  old  and 
to  keep  pace  with  the  growth  of  population.  But 
demands  increase  much  faster  than  population, 
and  the  demand  will  always  outrun  the  supply  as 
long  as  men  want  good  things.  New  inventions 
make  larger  demands  than  ever  upon  the  capi- 
talist and  it  is  no  new  discovery  that  worthy  in- 
ventions wait  for  j^cars  before  they  secure  ade- 
quate commercial  development.  In  the  different 
lines  of  progress  in  mechanics,  in  chemistry  and 
in  electricity  the  inventors  are  constantly  finding 
new  ways  of  doing  things  until  the  marvels  of  ma- 
terial invention  seem  to  rival  the  mysteries  of  the 


CAPITAL'S  ALTERED  STATUS     135 

human  brain.  Exaggeration  in  this  field  is  im- 
possible, because  no  human  mind  is  large  enough 
to  grasp  the  facts  adequately.  We  are  in  an 
era  when  capital  has  abundant  opportunity  for 
profitable  employment  at  home  and  when  there  is 
such  diversity  that  the  old  tariff  argument  of  the 
need  of  diversified  industries  is  wholly  outgrown. 
Such  is  our  chronic  business  condition  and  the  de- 
velopments of  the  recent  years  give  timple  assur- 
ance that  this  chronic  shortage  of  capital  and 
labor  will  be  only  intensified  as  men  invent  more 
machinery,  as  they  become  broader  in  their  out- 
look, as  they  become  accustomed  to  the  daily  use 
of  more  and  more  of  the  things  which  seem  to 
be  novelties  and  luxuries  today,  and  as  they  be- 
come more  imperative  in  their  mastery  over  the 
physical  world  which  they  are  bringing  into  sub- 
jection at  their  feet. 

A  commonplace  truth,  but  none  the  less  perti- 
nent and  mighty  even  though  commonplace,  is 
the  greatly  increased  efficiency  of  wealth-making 
machinery.  In  this  respect  the  status  of  capital 
has  altered  much  since  the  adoption  of  the  tariff 
system,  and  even  since  the  revival  of  the  policy  as 
an  incident  of  the  civil  war.  IVIachinery  makes 
wealth  for  the  country  faster  than  ever,  and  it  is 
a  reasonable  prediction  that  the  gain  of  the  fu- 
ture over  the  present  will  fully  correspond  to  the 
gain  of  the  present  over  the  past.  Accumula- 
tions of  wealth  occur  for  many  people  with  in- 
creasing  rapidity.     INIodcrn    fortunes,    compared 


136     THE  PASSING  OF  THE  TARIFF 

with  those  of  tlie  ante-war  period,  illustrate  this 
accumulation,  due,  certainly  in  a  large  degree, 
to  the  setting  to  work  of  countless  busy  ma- 
chines for  the  profit  and  ease  of  men.  Capital 
accumulates  faster  than  ever  before  and  it  is 
more  available  for  business  investments  than  ever 
before,  even  though  it  is  also  true  that  in  a  nor- 
mal financial  condition  of  the  country  there  is  a 
chronic  shortage  of  capital.  It  is  doubtless  true, 
if  any  one  wishes  to  make  the  point  in  opposition, 
that  the  consumption,  or  destruction,  of  wealth 
also  increases  rapidly.  Certainly  it  is  so.  We 
both  produce  and  consume  with  prodigality. 
Doubtless  the  rate  of  increase  of  both  produc- 
tion and  consumption  is  geometrical.  But  the 
undeniably  increasing  wealth  of  the  country,  as 
proved  by  the  enormous  individual  fortunes  of 
modem  times  and  in  the  improved  conditions  of 
the  great  mass  of  moderate  fortunes,  shows  that 
the  ratio  of  production  exceeds  that  of  consump- 
tion. Capital  is  gaining,  and  resources  for  in- 
vestment and  the  development  of  the  country's 
potentialities  are  constantly  becoming  larger. 

Connected  with  this  fact  of  rapidly  increasing 
wealth  goes  another  fact  of  large  importance  in 
connection  with  the  availability  of  capital  for  the 
development  of  the  country.  That  is  the  growth 
of  the  banking  system.  Especial  note  is  to  be 
made  of  the  rise  and  prosperity  of  the  savings 
banks.  Here  is  a  system  of  gathering  into  per- 
ceptible streams  the  little  tricklings   of  savings 


CAPITAL'S  ALTERED  STATUS     137 

which  went  into  the  old  stocking  or  the  bureau 
drawer  under  the  former  lack  of  system,  or  which 
were  no  savings  at  all  for  lack  of  the  inducements 
which  the  present  savings  bank  system  offers. 
Under  the  system  people  of  very  small  means,  put- 
ting aside  their  little  sums  for  old  age  or  for  a 
rainy  day,  contribute  to  a  total  for  the  entire 
country  of  thousands  of  millions  of  dollars.  A 
statement  published  in  December,  1907,  by  a 
financial  magazine  put  the  total  at  ahnost  $3,- 
700,000,000.  This  money  is  put  into  business. 
It  is  capital  made  productive.  It  is  a  strong 
factor  in  the  business  development  of  many  sorts 
of  enterprises.  Though  its  investment  is  re- 
stricted by  law  so  that  it  shall  not  be  ventured 
in  risky  schemes  and  shall  be  regarded  as  a  sacred 
trust  to  be  administered  by  its  trustees,  yet  it 
affords  a  great  fund  for  the  absolutely  safe  in- 
vestments near  home  and  liberates  other  capital 
in  the  hands  of  those  who  will  take  larger  risks 
for  larger  profits,  and  so  it  is  a  directly  available 
fund  for  developing  the  resources  of  the  country. 
This  system  was  not  a  factor  when  the  tariff 
system  was  established,  nor  for  many  years  after- 
ward. It  brings  into  the  money  market,  in  such 
quantity  as  to  be  a  material  factor  in  the  situa- 
tion, the  many  millions  which  are  yearly  saved 
by  the  thrifty  and  prudent  people  of  the  United 
States. 

Here,  then,   is   the  situation,  the  natural   and 
inventive  resources  of  the  country  always  offer- 


138     THE  PASSING  OF  THE  TARIFF 

ing  profitable  investments  for  more  capital  than 
can  be  produced  for  their  development,  and  de- 
manding the  emplo^aiient  of  more  labor  than  can 
be  found  for  a  supply.  This  is  the  chronic  and 
healthful  condition.  Capital  is  produced  in  in- 
creasing abundance,  though  always  insufficient 
for  the  demand,  and  prosperity  follows  every  le- 
gitimate use  of  every  dollar. 

Right  across  this  current  of  enterprice,  which 
pours  money  into  profitable  ventures,  comes  the 
obstruction  tariff  policy  and  demands  the  inter- 
ference of  the  government,  by  force  of  law,  sup- 
ported by  all  the  power  of  the  nation,  to  the  end 
that  this  current  of  money  shall  be  diverted  from 
profitable  investment  to  industries  which  are  in- 
capable of  support  if  they  are  left  to  the  natural 
conditions  of  the  market.  That  is  the  very  sup- 
position which  underlies  their  demand  for  a  tar- 
iff. If  they  are  put  upon  the  same  footing  as 
other  industries  which  men  are  establishing  ev- 
erywhere out  of  their  fertile  brains  and  long  ex- 
perience, they  fail.  They  cannot  stand  alone. 
They  cannot  go  out  in  the  open  with  those  who 
ask  no  favors  of  the  government  and  hold  their 
own.  They  are  so  weak  that  they  cannot  live. 
They  are  founded  upon  such  unwise  conditions 
that  they  cannot  pa}'^  dividends  nor  give  assur- 
ance of  permanent  employment  to  their  labor. 
They  are  not  fitted  to  the  places  in  which  it  is 
sought  to  establish  them.  They  are  merely  the 
result  of  the  envious  longing  which  comes  from 


CAPITAL'S  ALTERED  STATUS     139 

seeing  other  men,  in  some  other  country,  under 
conditions  which  nature  has  there  made  profit- 
able, making  money,  and  the  envious  man  says: 
"  If  my  government  will  pay  the  expense  of  per- 
manent conditions  like  those,  I  can  make  money 
like  that,  too."  But  every  one  knows  that  the 
government  has  no  money  of  its  own.  It  all 
comes  out  of  the  people. 

That  is  the  challenge  to  the  common  sense  of 
the  people  of  the  United  States  which  is  made 
by  the  obstructive  tariff  system.  That  is  the 
gauntlet  thrown  down  to  their  sense  of  fair  play. 
This  challenge  comes  with  more  force  today  than 
ever  because  the  opportunities  for  profitable  in- 
vestment, without  any  interference  by  the  gov- 
ernment in  any  way  whatever,  are  constantly 
multiplying.  Capital  for  profitable  investment 
is  becoming  more  and  more  available  as  the  pros- 
perity of  the  country  increases.  The  folly  of  in- 
vesting in  unprofitable  enterprises  is  daily  becom- 
ing more  and  more  emphasized.  Obstructionists 
will  daily  be  harder  put  to  it  to  find  plausible 
excuses  for  their  policy  and  the  people  will  de- 
mand with  more  and  more  clearness  that  this  in- 
terference with  the  current  of  capital  flowing  into 
money-making  investments  within  our  own  bor- 
ders shall  stop.  We  are  in  a  new  era  for  capital, 
and  the  capitalists  who  have  the  sagacity,  patriot- 
ism and  courage  to  stand  up  without  goveniment 
aid  will  surely  make  themselves  heard  and  felt. 


CHAPTER  X 
PUBLICITY  FOR  FAVORED  INTERESTS 

Whatever  differences  exist  regarding  the  wis- 
dom and  the  justice  of  the  protective  system  for 
industry,  certainly  all  sides  are  agreed  upon  the 
proposition  that  the  prosperity  of  the  protected 
nation  as  a  whole  is  the  final  criterion.  It  is  not 
to  be  supposed  for  a  moment  that  any  people 
capable  of  self-government,  or  that  any  govern- 
ment not  responsible  to  the  people,  would  delib- 
erately admit  that  it  was  pursuing  a  policy  for 
the  benefit  of  a  favored  class  which  would  result 
in  detriment  to  the  nation  as  a  whole.  So  much, 
then,  for  a  common  agreement  at  the  outset. 

It  is  not  sufficient,  therefore,  to  prove  the  wis- 
dom of  protecting  any  particular  industry,  to 
show  that  that  industry  has  prospered  under  the 
protective  system.  Any  industry  which  is  per- 
mitted to  have  exceptional  advantages  in  wa}'  of 
taking  money  from  the  people  for  the  direct  pur- 
pose of  its  own  financial  prosperity  ought  to  be 
able  to  show  such  prosperity.  If  it  could  not 
show  prosperity  the  presumption  would  be  that 
some  one  had  blundered.  But  a  showing  of  pros- 
perity would  not  prove  necessarily  that  the  entire 
community  had  been  benefited  as  much  as  the 
protected  industry.  It  must  be  a  part  of  the 
demonstration,  also,  in  order  to  show  the  justice 
140 


PUBLICITY  FOR  FAVORITES     141 

of  the  protection,  that  the  direct  benefit  to  the 
protected  industry  is  so  distributed  through  the 
community  as  to  disappear  entirely  as  direct  ben- 
efit, giving  to  every  person  as  many  advantages 
as  are  enjoyed  by  those  who  own  the  protected  en- 
terprise. Otherwise  it  would  be  the  fact  that 
some  of  the  people  reaped  an  advantage  over 
others  at  the  expense  of  those  others  under  a  sys- 
tem of  taxation  which  should  bear  upon  all  per- 
sons equally,  which  would  be  contrary  to  the 
spirit  of  our  institutions. 

It  is  the  impossibility  of  demonstrating  the 
soundness  of  the  conclusion  that  all  people  are 
benefited  equally  under  the  protective  policy  which 
prevents,  and  promises  to  prevent  forever,  any 
demonstration  of  the  wisdom  of  the  protective 
theory  so  as  to  convince  all  citizens.  But,  since 
all  must  agree  that  the  benefit  of  the  public  is 
the  sole  justification  of  any  protective  system 
whatever,  it  follows  that  some  method,  consistent 
with  reasonable  expense,  if  any  there  be,  should 
be  adopted  in  order  to  inform  the  public  of  the 
effect  of  the  system,  of  the  changes  which  are 
occurring  constantly,  and  of  the  probable  ad- 
vantage to  the  public  in  continuing  the  policy 
of  protection  further  in  the  case  of  any  particu- 
lar industry. 

Though  there  has  been  no  change  in  the  mat- 
ter of  the  right  of  the  people  in  securing  infor- 
mation, or  in  regard  to  the  soundness  of  the  pol- 
icy of  securing  it,  since  the  establishment  of  the 


142     THE  PASSING  OF  THE  TARIFF 

protective  system,  yet  practicall}^  there  has  been 
a  great  change  in  the  relation  of  the  public  to 
the  s^'stem,  a  change  which  suggests  and  demands 
a  new  departure.  We,  as  a  people,  are  becoming 
far  more  interested,  more  intelligent  and  more 
practical  in  dealing  with  public  service  corpora- 
tions. We  have  pretty  clearly  defined  doctrines 
regarding  the  status  of  railroad  corporations, 
electric  roads,  gas  and  electric  light  companies, 
water  companies,  insurance  companies,  and  so  on, 
under  state  laws.  We  give  monopoly  to  certain 
corporations  which  seiie  the  public.  We  call 
them  "  quasi  public  "  corporations,  and  we  con- 
trol them  by  giving  to  officials  who  represent  the 
people  power  to  regulate  their  charges  and  by  re- 
quiring them  to  make  full  annual  reports  to  the 
public  regarding  the  details  of  their  business. 
Though  power  to  regulate  rates  is  not  practiced 
in  many  instances,  yet  it  is  sufficiently  practiced 
to  leave  no  doubt  of  the  right  of  the  public  over 
all  corporations  when  the  public  chooses  to  assert 
its  right.  It  has  become  an  established  principle 
with  us  in  state  legislation  that  public  sen^ice 
coi-porations  must  render  an  account  to  the  public 
for  the  benefits  which  they  receive  from  the  pub- 
lic. The  corporations  expect  this,  and  it  is  to  be 
presumed  that  the  returns  are  made  with  some  ap- 
proach to  accuracy.  The  right  of  the  public 
to  have  the  information  is  admitted  by  the  cor- 
porations, and  whether  there  is  concealment  or 
not,  the  representatives  of  the  public  have  full 


PUBLICITY  FOR  FAVORITES      |143 

right  and  power  by  law  to  make  any  investiga- 
tion which  will  remove  all  doubt  regarding  the 
fullness  or  the  accuracy  of  the  returns.  The 
corporations  know  that  they  have  no  standing 
upon  the  proposition  that  they  can  refuse  to  in- 
form the  public  regarding  the  details  of  their 
business. 

Now,  in  the  matter  of  our  favored  industries, 
it  is  to  be  noticed  that  they  have  their  status  as 
protected  solely  upon  the  theory  that  they  benefit 
all  people  equally.  They  are  a  part  of  the  gov- 
ernmental system  of  the  country.  They  mark  a 
long  step  in  the  socialistic  tendencies  of  the  times, 
for  in  them  the  people  have  established  a  system 
whereby  the  entire  civil  and  military  power  of  the 
nation  is  back  of  the  law  which  excludes  imports 
to  a  certain  extent  in  order  that  certain  conse- 
quences may  follow  at  home.  The  nation,  as  a 
whole,  is  committed  to  support  certain  business 
enterprises.  As  a  nation  it  is  carrying  on  those 
particular  kinds  of  business,  by  support  of 
the  public  authorities,  backed  by  the  public 
forces,  and  for  the  public  good.  Enormous 
properties  are  involved  in  this  policy,  and 
therefore  the  protective  system  commits  the  people 
to  an  overwhelming  extent  to  the  carrying  on 
of  business  enterprises  for  the  production  and 
distribution  of  goods  as  a  measure  of  public 
benefit.  By  socialistic  standards,  the  protective 
system  is  a  long  step  in  socialism. 

Every  one  of  the  favored  industries  is  there- 


144     THE  PASSING  OF  THE  TARIFF 

fore  as  truly  a  quasi  public  interest  as  is  any  of 
the  corporations  now  known  specifically  by  that 
description,  such  as  the  railroads  or  the  public 
lighting  companies.  Their  public  nature  is  their 
most  important  aspect,  and  their  ownership  by 
private  individuals  is  subordinate  to  their  public 
aspect,  just  as  the  ownership  of  railroad  stocks 
by  private  persons  does  not  diminish  the  fact  that 
the  most  important  aspect  of  railroad  property 
is  its  relation  to  the  public.  Private  considera- 
tions must  be  secondary,  for  the  well  being  of 
the  whole  is  paramount  to  that  of  any  part. 
First  of  all  comes  the  public  relation,  and  the 
policy  of  railroad  management  must  be  settled  by 
what  will  serve  the  public  best,  not  what  will  be 
of  most  advantage  to  the  private  stockholders. 
The  reason  why  the  public  authorities  refuse  to 
permit  street  railway  charges  to  be  reduced  be- 
low the  point  of  paying  a  reasonable  dividend 
to  the  stockholders,  as  has  occuiTed  repeatedly  in 
IMassachusetts,  is  not  that  the  state  is  bound  to 
see  that  private  persons  have  dividends  upon 
their  investments  as  a  matter  of  general  princi- 
ple, but  that  persons  who  serve  the  public  by  in- 
vesting their  property  in  quasi  public  enterprises 
are  entitled  to  a  reasonable  return  upon  their  in- 
vestment as  truly,  as  if  they  were  not  under  con- 
trol of  the  public  and  should  not  be  required  by 
the  public  to  be  sacrificed  for  the  pecuniary 
benefit  of  the  public.  But  the  state  Is  no  more 
bound    to    guarantee     a    dividend    upon    railway 


PUBLICITY  FOR  FAVORITES      145 

stock  to  the  stockholder  in  his  private  capacity 
than  it  is  bound  to  see  that  every  famier  secures 
a  reasonable  return  upon  his  property  every  year. 
Public  considerations,  therefore,  being  para- 
mount to  private,  the  principle  holds  for  the  fa- 
vored industries.  The  public  has  a  direct  finan- 
cial interest  in  all  favored  enterprises  and,  as  a 
partner  or  financial  supporter,  is  entitled  to  in- 
formation regarding  the  condition  of  the  busi- 
ness. As  a  matter  of  right,  therefore,  the  fa- 
vored interests  should  be  required  to  make  reports 
to  the  pubhc, —  annual  by  the  precedent  estab- 
lished in  other  cases, —  just  as  the  railroads,  gas 
and  electric  light  companies,  the  insurance  com- 
panies and  other  enterprises  are  required  to  make 
annual  reports.  The  people  have  a  right  to' 
know,  as  closely  as  reports  can  show,  what  have 
been  the  details  of  the  system,  what  has  been  the 
expense  of  operation,  how  much  the  rate  of  divi- 
dends, what  burdens  the  public  has  assumed  in 
order  to  give  the  protection,  and  what  return  it 
has  received  as  a  consequence  of  the  assumption 
of  the  burdens.  Though  it  may  be  impossible 
to  measure  the  cause  and  effect  in  many  cases,  yet 
the  public  has  a  right  to  know  at  least  all  of  the 
details  which  bear  on  their  relations  to  the  per- 
sonal owTiers  of  the  enterprises  which  are  pro- 
tected. Under  no  theory  consistent  with  Ameri- 
can principles  of  political  rights  can  the  owners 
of  enterprises  demand  that  the  people  be  sharers 
with  them  in  the  burdens  of  their  business  as  a 


146      THE  PASSING  OF  THE  TARIFF 

principle  of  public  policy  and  then  deny  the  right 
of  the  people  to  a  full  accounting  in  regard  to 
the  details  of  the  business. 

More  than  this,  since  the  system  is  maintained 
by  the  public  assumption  of  a  burden,  in  the  first 
place,  with  the  expectation  that  the  public  will 
more  than  recoup  themselves  from  the  investment, 
it  is  right  that  no  favored  industry  should  ever 
be  permitted  to  declare  a  rate  of  dividend  higher 
than  the  average  rate  of  dividends  on  safe  in- 
vestments. It  may  not  be  as  low  a  rate  of  divi- 
dend as  equals  the  rate  of  interest  netted  on  a  pur- 
chase of  United  States  government  bonds,  but  it 
should  approximate  that  rate.  If  the  business  is 
capable  of  yielding  any  profit  above  that  rate, 
then  it  is  a  fair  proposition  that  the  people  should 
receive  the  benefit  directly  by  a  reduction  in  the 
prices  for  the  product  at  retail,  so  as  to  bring 
down  the  rate  of  dividend,  or,  if  higher  prices 
are  charged,  then  all  that  is  received  in  excess  of 
the  moderate  dividend  should  be  paid  into  the 
public  treasury.  In  either  case,  the  owners  of 
the  enterprise,  having  bound  the  people  by  law, 
or  the  people  having  bound  themselves,  to  assure 
a  fair  dividend,  might  well  regard  themselves  as 
fortunate  with  such  governmental  backing,  con- 
sidering the  risks  suffered  by  those  who  stand  out 
in  the  storm  and  stress  of  business  without  any 
governmental  protection.  This  is  a  fair  propo- 
sition under  our  theory  of  protection  and  no  good 
protectionist   can   consistently   object  to    it.     If 


PUBLICITY  FOR  FAVORITES      147 

objection  should  be  raised,  it  would  at  once  show 
that  the  protected  objector  believed  that  he  had 
a  right  to  use  the  public  for  his  private  financial 
advantage.  Our  theory  of  protection  will  not 
permit  any  such  assumption  publicly,  whatever 
its  friends  may  know  of  its  aspects  in  private. 

It  may  be  said  truly  that  it  would  not  be  prac- 
ticable to  enforce  such  a  system  of  annual  re- 
ports. It  is  true  that  our  favored  interests  are 
exceedingly  numerous  and  that  the  problem 
would  be  very  complicated.  We  have  duties  on 
hay  and  cattle,  lime  and  lumber,  on  fish,  flesh 
and  fowl,  products  of  land  and  sea,  animal,  vege- 
table and  mineral,  of  all  sorts  and  conditions.  It 
is  quite  true,  as  a  practical  proposition,  that  it 
would  be  exceedingly  difficult  and  expensive  to  col- 
lect, digest  and  print  the  statistics  which  would 
show  the  bearings  of  the  tariff  upon  the  prosper- 
ity of  the  nation.  But  practical  difficulties  have 
no  bearing  upon  the  right  of  the  people  to  get  the 
information,  if  they  choose  to  exercise  their  right. 

Wherever  practicable,  therefore,  it  would  be 
well  for  the  people  to  obtain  full  details  regard- 
ing the  operation  of  the  protective  system,  and 
certainly  there  are  many  branches  in  which  it  is 
possible  to  learn  sufficient  to  warrant  the  collec- 
tion of  the  figures.  In  the  large  number  of 
woolen  mills,  cotton  mills,  iron  mills,  shoe  fac- 
tories, silk  mills,  and  establishments  of  all  kinds 
which  are  under  organized  heads,  whether  as  cor- 
porations or  unions  or  combinations  of  men  in 


148     THE  PASSING  OF  THE  TARIFF 

any  way,  where  records  are  kept,  where  there  are 
pay  rolls,  where  there  is  deahng  with  transporta- 
tion companies,  wliere  there  is  a  central  office 
with  clerical  force,  in  all  such  cases  it  would  be 
possible  to  gather  statistics.  The  fact  above  all 
others  which  the  public  has  the  right  to  know  is 
the  rate  of  profit  upon  the  investment  which  the 
enterprise  is  paying.  Results  concern  the  people 
most  and  the  most  vital  result  is  especially  sub- 
ject to  the  requirement  of  being  stated  publicly. 
Recurring  to  the  fundamental  theory  of  pro- 
tection,—  the  benefit  of  the  entire  people  regard- 
less of  any  special  benefit  to  any  particular  per- 
sons or  classes, —  it  is  to  be  observed  that  the 
theory  of  infant  industry  applies  as  ti*uly  to  many 
enterprises  not  now  protected  as  it  does  to  the 
most  highly  protected  industries.  Though  the 
to  such  industries  as  are  pursued  abroad  as  well 
doctrine  of  protection  has  come  to  be  applied  only 
as  in  this  country,  and  the  theory  has  special  ref- 
erence to  warding  off  from  the  capital  and  labor 
engaged  here  the  competition  of  capital  and  labor 
engaged  abroad,  yet  this  application  of  the  the- 
ory can  be  sound  only  as  a  broader  proposition 
is  sound,  and  that  broader  proposition  is 
that  it  is  wise  public  policy  for  the  people,  in 
their  collective  political  capacity,  to  support  at 
a  temporary  loss  any  enterprise  which  promises 
to  return  to  the  people  as  a  whole  sufficient  re- 
ward to  recoup  them  for  all  outlays,  or  which 
gives  such  other  continuing  benefits  (such  as  in- 


PUBLICITY  FOR  FAVORITES      149 

surance  against  unpreparedness  for  war,  intel- 
lectual or  moral  progress  due  to  diversified  indus- 
tries, or  other  intangible  but  real  gain)  as  will 
justify  pursuing  the  policy  at  an  admitted  finan- 
cial loss.  Thus  it  is  a  practice  for  towns  and 
cities  to  offer  manufacturing  establishments  spe- 
cial inducements  to  locate  with  them.  Thus  all 
property  used  for  religious  purposes  is  exempt 
from  taxation  (though  there  are  conclusive  rea- 
sons why  religion  should  not  be  under  control  of 
the  state),  and  educational,  charitable,  literary 
and  benevolent  institutions  are  also  exempt. 

But  the  protective  theory  is  not,  per  se,  lim- 
ited to  application  to  industries  open  to  compe- 
tition from  abroad.  While  public  good  is  sought 
by  the  protective  doctrine  in  giving  popular  help 
to  the  tin  plate  industry,  the  same  reasoning  ap- 
plies equally  to  the  estabhshment  of  a  barber's 
shop,  the  opening  of  a  new  fruit  store,  or  any 
other  minor  industrial  or  commercial  establish- 
ment in  any  village  or  at  any  cross  roads.  Pro- 
vided the  governmental  support  during  the  period 
of  inability  to  stand  alone  is  continued  till  suffi- 
cient patronage  is  assured  to  warrant  the  with- 
drawal of  the  support,  it  will  be  profitable  for 
the  people  as  a  whole,  according  to  the  protective 
theory,  to  give  that  support.  The  smallness  of 
the  enterprise  is  not  a  pertinent  consideration,  for 
the  outlay  required  of  the  people  would  be  cor- 
respondingly small.  As  in  all  other  cases,  the 
people  would  have  a  right  to  know  the  details  of 


150     THE  PASSING  OF  THE  TARIFF 

the  business  in  these  small  instances.  The  ex- 
pediency of  collecting  the  statistics  "would  be  an- 
other consideration. 

Development  of  industries  for  the  profit  of  the 
people  as  a  whole,  let  it  be  noted  again  for  an- 
other point  in  the  argument,  is  the  purpose  of 
the  protective  system.  The  establishment  of  any 
protective  duty,  furtheniiore,  is  an  advertisement 
to  the  nation  at  the  outset  that  the  industry  can- 
not support  itself  without  the  protection,  for  if 
it  could  do  so,  the  protection  would  not  be  neces- 
sary. Inability  of  self-support,  therefore,  with 
fair  dividends  for  the  capital  and  fair  wages  for 
the  labor  emplo3^ed,  is  the  first  requisite  of  an 
enterprise  asking  for  public  help,  implying  a 
capacity  in  the  enterprise  to  make  adequate  re- 
turn subsequently  to  the  public,  and  surely  there 
is  no  end  to  the  number  of  such  entei'prises  as 
they  may  plausibly  be  made  to  appear  before 
they  have  been  tested.  For  Congress,  then,  the 
practical  question  is  how  to  discriminate  between 
applicants  for  protection,  what  criterion  apply 
to  the  different  degrees  of  inability  of  self-sup- 
port, how  soon  the  enterprise  promises  to  become 
self-supporting,  how  soon  the  period  of  proba- 
tion shall  end  officially  and  the  experiment,  if 
unsuccessful,  be  abandoned  as  hopeless. 

From  this  point  of  view,  therefore,  it  is  imper- 
ative, if  the  people  are  to  act  as  intelligent  pro- 
tectionists, to  have  some  means  for  determining 
whether,  in  the  case  of  any  particular  industry, 


PUBLICITY  FOR  FAVORITES      151 

the  return  warrants  the  outlay.  Manifestly, 
plausible  candidates  for  protection  are  exceed- 
ingly numerous,  for  inability  of  self-support  can 
be  predicated  of  countless  enterprises,  and  he 
must  be  a  poor  prospectus-writer  who  cannot 
make  it  certain  to  a  demonstration  that  his  partic- 
ular scheme  is  sure  to  result  in  large  public  bene- 
fit. Some  practical  criterion,  therefore.  Con- 
gress must  have,  for  with  all  the  exceptional  abil- 
ity conceded  to  representatives  of  the  people, 
surely  neither  they  nor  their  constituents  will 
claim  that  they  have  such  prevision  as  to  be  able 
to  foretell  accurately  whether  or  not  the  returns 
upon  any  particular  enterprise  will  justify  tax- 
ing the  people  in  order  to  give  it  a  start. 

Presumably,  therefore,  in  the  nature  of  the 
case,  since  all  men  are  fallible,  there  are  some 
protected  enterprises  which  are  unprofitable  for 
the  public,  and  which  will  never  be  able  to  justify 
the  protection  given.  Such  enterprises  ought 
to  be  weeded  out,  and  surely  there  is  no  better 
way  of  learning  the  truth  than  by  intelligently 
trying  to  find  out  about  it.  Some  way  or  other 
the  public  ought  not  to  be  taxed  perpetually  for 
any  kind  of  business  which  will  never  justify  the 
expenditure.  In  making  this  inquiry,  the  ut- 
most liberality  of  interpretation  would,  of  course, 
be  permitted,  as  is  demanded  by  the  protectionists, 
for  indirect  benefits  in  the  way  of  increasing  the 
business  of  the  nation  by  bringing  in  other  in- 
dustries, by  preparing  the  nation  for  self-reliance 


152      THE  PASSING  OF  THE  TARIFF 

in  case  of  war,  in  way  of  developing  the  moral 
and  intellectual  faculties  and  resources  of  the  peo- 
ple by  having  diversified  industries,  and  by  the 
other  indefinite  benefits  which  are  supposed  to 
inhere  in  the  protective  system,  but  which  are 
admittedly  incapable  of  measurement  in  dollars. 

But,  with  all  this  liberality  of  intci*pretation, 
some  enterpi'ises  are  in  all  probability-  foisted  upon 
the  public  which  have  not  and  will  not  justify 
the  expense  they  cause.  Therefore  it  is  a  plain 
business  proposition  that  the  people  ought  to 
have  some  means  of  discovering  where  they  are 
putting  money  into  a  hole  without  any  bottom, 
or  whether  or  not  they  are  doing  so,  in  order  that 
every  unprofitable  enterprise  may  be  abandoned. 
As  a  matter  of  the  right  of  the  people  to  learn 
the  facts,  there  can  be  no  doubt.  It  is  for  the 
people  to  say  whether  or  not  the  statistics  should 
be  gathered  in  any  particular  case.  The  propo- 
sition here  maintained  is  that  the  people  ought 
to  have  the  machinery  of  determining,  as  far  as 
practicable,  what  enterprises  in  which  they  are 
now  engaged  are  presumably  to  be  forever  un- 
profitable, or  if  any  are  such,  and  that  this  ma- 
chinery should  be  in  exercise. 

The  fact  that  the  people  have  thus  far  sub- 
mitted to  the  a  'priori  arguments  of  the  protec- 
tionists that  the  protection  will  alwa^'s  work  out  a 
profit  is  no  reason  why  such  laxity  in  business 
methods  should  be  permitted  to  exist  any  longer. 
It  may  be  pennitted  here  to  wonder  why  people 


PUBLICITY  FOR  FAVORITES     153 

like  those  of  the  United  States,  who  have  a  pro- 
nounced, proclaimed  and  reiterated  hostihty  to 
all  a  priori  theories  as  such,  who  have  always 
ridiculed  free  traders  as  a  priori  visionaries,  and 
have  always  insisted  that  they  themselves  are 
strictly  and  exclusively  practical  or  a  posteriori 
demonstrators,  should  down  to  this  day  have  ac- 
cepted without  examination  the  pure  a  priori 
theory  that  every  protected  enterprise  is  surely 
profitable  and  should  never  be  subject  to  inquiry 
to  see  whether  or  not  the  a  priori  argument,  in 
any  particular  case,  is  well  founded.  It  would 
seem  as  if  the  people,  judged  by  their  o^vn  stand- 
ard, had  made  themselves  just  a  little  bit  ridicu- 
lous in  not  carrying  their  business  principles  to 
a  more  practical  conclusion. 

But  since  there  is  as  much  time  coming  as  there 
has  time  gone  by,  it  is  timely  now  to  introduce 
the  needed  reform  and  to  provide  a  means 
whereby,  for  all  the  future,  there  may  not  be  con- 
tinued the  support  of  enterprises  forever  un- 
profitable. It  would  seem  as  if  such  a  proposi- 
tion would  be  self-demonstrating  to  such  practi- 
cal people  as  the  business  men  of  the  United 
States  and  they  could  be  relied  upon  to  demand 
of  Congress  the  passage  of  the  necessary  legisla- 
tion. 

It  is  a  practical  proposition,  therefore,  that 
Congress  take  up  the  matter  and  arrange  hence- 
forth for  an  annual  series  of  statements  to  show 
the  benefit  to  the  nation  as  a  whole  of  the  pro- 


154*     THE  PASSING  OF  THE  TARIFF 

tection  which  is  given  to  protected  enterprises. 
Vast  financial  interests  are  involved,  and  it  is  of 
the  first  importance  that  the  people  keep  up  with 
the  times.  Conditions  of  production  and  dis- 
tribution are  changing  every  year.  New  inven- 
tions, new  methods  of  cultivation,  new  ideas  in 
manufactures,  new  ways  of  treating  raw  prod- 
ucts make  frequent  changes  in  the  status  of  any 
protected  industry,  in  its  value  to  the  people,  and 
in  the  practical  bearing  of  the  question  whether 
the  protective  policy  should  be  continued  in  re- 
gard to  it. 

The  people  of  the  United  States  have  a  right  to 
a  thorough  examination  of  the  system  from  its 
beginning,  to  learn  how  much  the  government 
has  received  in  customs  duties,  how  much  from 
particular  interests,  and  how  much  those  interests 
have  presumably  benefited  the  country  over  and 
above  their  expense.  Doubtless  there  are  records 
in  good  preservation  to  enable  the  computation 
of  duties  received  to  be  made  for  less  cost  than  the 
value  of  the  statement  would  be  to  the  country. 
Doubtless,  also,  the  sources  of  income  to  the  gov- 
ernment could  be  stated  as  far  as  they  were  di- 
vided among  the  great  protected  staples,  such  as 
iron,  wool,  lumber  and  so  on.  The  proposed 
annual  statement  should  give  such  details  for 
the  year  covered,  published  and  circulated 
at  the  expense  of  the  people,  for  the  benefit 
of  the  people,  in  order  to  show,  year  by  3'ear,  the 
relations  of  the  taxpayers  to  their  favored  en- 


PUBLICITY  FOR  FAVORITES      155 

terprises.  Prices  of  foreign  goods  in  the  pro- 
tected lines,  or  labor  in  those  lines,  and  of  the 
cost  of  transportation,  including  insurance  and 
all  other  items  which  enter  into  the  cost  of  put- 
ting foreign  goods  into  this  country,  should  be 
made  a  part  of  the  showing.  Further  than  this, 
the  annual  statement  should  give,  as  far  as  the 
data  would  permit,  the  adequacy  of  the  home 
supply  to  the  home  market,  the  probable  cost  of 
the  goods  without  protection,  and  other  items  in 
the  account  in  order  to  give  the  people  as  com- 
plete an  idea  as  possible  of  the  actual  benefit  they 
are  receiving  from  the  protective  system  in  case 
of  each  favored  industry. 

Nothing  short  of  such  an  effort  to  learn  where 
they  stand  will  be  creditable  to  the  intelligence 
of  the  people  of  the  United  States.  To  say 
that  such  inquiries  will  be  finiitless  will  be  only 
to  affirm  that  we  are  going  blindly  and  that  it 
will  be  better  to  go  blindly  forever  than  to  open 
our  eyes.  If  that  is  a  fair  argument,  then  it  is 
as  pertinent  to  say  that  protection  is  unspeakably 
foolish  as  it  is  to  say  that  it  is  supremely  wise, 
and  neither  assertion  can  be  disproved  by  facts. 
To  assert  upon  general  principles  that  protection 
is  supremely  wise  and  then  to  object  to  any  ef- 
fore  to  find  out  how  wise  it  is  on  the  ground  that 
the  result  is  incapable  of  determination  would  be 
such  an  extreme  application  of  that  a  'priori  ar- 
gument regardless  of  facts  as  would  severely 
shock  such  a  practical,  a  posteriori    people  as 


156     THE  PASSING  OF  THE  TARIFF 

those  of  the  United  States  when  they  once  real- 
ized the  true  situation.  One  cannot  doubt  that 
they  will  insist  upon  learning  the  facts,  though 
the  heaven  of  a  priori  theory  should  fall. 

In  regard  to  the  benefit  of  protection  to  the 
nation  as  a  whole,  in  case  of  any  particular  en- 
terprise, it  is  to  be  noted  further,  that  it  would 
not  be  sufficient  justification  to  shoAV  that  there 
was  a  net  financial  gain  by  the  transaction.  Full 
publicity  would  be  of  invaluable  help  in  certain 
cases.  The  annual  report  ought  to  show  how  the 
fund  collected  by  the  protective  agency  is  dis- 
tributed, supposing  that  a  net  profit  is  left  to  the 
nation  as  the  result  of  the  protection.  The  pri- 
mary fact  in  the  case  of  most  of  our  highly  fa- 
vored industries  is  that  a  very  few  people  handle 
the  fund  in  the  first  place,  for  by  the  very  theory 
of  the  S3\stem  a  great  deal  of  the  wealth  it  cre- 
ates never  gets  into  the  hands  of  the  government, 
but  goes  into  the  pockets  of  the  owners  of  the 
protected  industry.  The  invested  capital  is  pro- 
tected. But  free  trade  in  the  labor  of  the  men 
and  women,  boys  and  girls  who  work  in  the  fac- 
tories prevails.  Presumably  the  labor  is  exposed 
to  the  competition  of  all  other  classes  of  labor 
within  our  tariff  walls.  The  annual  report  ought 
to  show,  therefore,  whether  the  fund  accumulated 
in  the  hands  of  capital  by  the  tariff  is  distributed 
so  as  to  benefit  all  citizens  equally.  Is  the  wealth 
secured  by  the  tariff  practically  held  by  a  few  or 
is   it  distributed  according  to  the  value  of  the 


PUBLICITY  FOR  FAVORITES      157 

contributions  made  to  it?  Does  it  go  for  au- 
tomobiles and  yachts,  dress  and  dogs,  music  and 
paintings,  fancy  dinners  and  the  best  wines,  or 
for  rent  of  small  houses,  for  food,  clothing,  doc- 
tors' bills,  education  and  religious  purposes? 
Does  the  duty  put  a  real  burden  upon  the  masses 
and  increase  the  luxuries  of  the  wealthy  few, 
even  though  a  total  financial  profit  of  the  system 
can  be  figured  for  the  nation  out  of  its  transac- 
tion? This  is  a  fair  and  pertinent  question. 
Some  sort  of  solution  can  be  reached  approxi- 
mately by  experts  employed  by  the  people  to 
serve  the  cause  of  the  people,  and  there  is  not 
the  slightest  doubt  that  the  people  would  gladly 
pay  all  of  the  expense  involved  in  order  to  secure 
the  facts. 

Furthermore,  this  annual  report  to  the  public 
should  set  forth  the  true  condition  of  the  cap- 
ital employed.  Since  the  people's  money  is  in 
it  and  the  people  are  made  by  law  to  assume  the 
risk  of  the  success  of  the  business  when  other- 
wise it  is  admitted  that  it  would  be  a  fail- 
ure, they  have  a  right,  which  ought  to  be  a 
legal  right,  to  know  the  truth  about  the  com- 
binations of  capital  and  the  risks  which  are  run 
by  more  or  less  variations  in  the  ability  of  the 
managers.  The  people  have  a  right  to  know 
whether  the  trustees  of  their  interests  have  been 
watering  the  stock  of  their  corporations  in  order 
to  conceal  excessive  dividends  or  to  facilitate 
stock  manipulations  by  inside  speculators.     They 


158    THE  PASSING  OF  THE  TARIFF 

have  a  right  to  know  what  rate  of  profit  their 
investment  is-  earning  and  what  dividends  are 
paid.  They  are  entitled  to  know  about  the  ex- 
pense and  method  of  management,  how  much 
is  paid  for  legal  expenses,  where  competition  is 
felt  most  keenly,  whether  from  home  competitors 
or  from  foreign  rivals,  and  what  are  the  favor- 
able and  the  unfavorable  conditions  surrounding 
the  enterprise.  None  of  these  essential  facts 
should  be  M'ithheld,  for  every  favored  industry  is 
first  of  all  a  public  concern ;  its  ownership  by  pri- 
vate individuals  is  a  secondary  consideration. 
The  rights  of  the  public  are  paramount. 

Again,  the  annual  report,  in  order  to  be  im- 
partial, should  show  where  the  protective  system 
fails  to  protect  sufficiently.  If  there  is  any  kind 
of  business  where  disaster  has  befallen  or  is 
threatening  because  the  people  have  not  put  un- 
der it  sufficient  financial  support,  then  it  is  only 
common  sense,  as  long  as  the  protective  system 
is  continued,  that  the  facts  should  be  published, 
as  far  as  they  can  be  ascertained. 

Another  pertinent  point ;  it  is  affirmed,  with 
specifications,  that  the  protective  system  destroys 
industries  as  well  as  creates  them.  For  instance, 
the  former  large  iron  manufacture  of  INIassachu- 
setts  is  affirmed  by  experts  in  that  matter  to  have 
been  ruined  by  the  high  tariff  favors  given  to 
Pennsylvania.  Other  instances  have  been  men- 
tioned of  prosperity  destroyed,  of  employees  de- 
prived of  occupation,  of  want  and  penury  caused 


PUBLICITY  FOR  FAVORITES       159 

by  the  protective  system's  strangling  industries 
which  could  prosper  and  employ  large  numbers 
of  people  if  the  tariff  were  removed.  Surely  the 
government  facility  in  collecting  statistics  could 
be  well  employed  in  these  annual  reports  in  show- 
ing how  far  such  conditions  were  created  and 
continued  by  the  tariff  and  they  could  be  bal- 
anced against  gains  credited  to  the  tariff.  Let 
the  truth  be  given  impartially. 

It  is  submitted,  in  conclusion,  that  every  prop- 
osition advanced  here  for  publicity  for  protected 
interests  is  in  harmony  with  the  avowed  purpose 
of  protection.  The  plan  can  be  objectionable 
to  no  one  who  is  desirous  that  the  system  should 
be  applied  impartially.  Aside  from  its  status  as 
a  right  of  the  people,  publicity  is  only  the  appli- 
cation of  common  sense  in  a  democratic  govern- 
ment where  all  measures  of  public  pohcy  must 
be  determined  by  the  people  eventually.  It  is 
true  that  there  are  practical  difficulties,  but  it  is 
also  true  that  continued  experience  would  reduce 
them,  and  the  value  of  publicity  to  the  public 
would  increase  with  the  lengthening  of  the  base 
line  upon  which  their  calculations  and  deductions 
were  founded.  It  would  be  no  difficult  matter  for 
Congress  to  prepare  a  schedule  of  questions  to 
be  answered  annually  by  a  large  number  of  fa- 
vored industries,  and  the  expert  statisticians  in 
the  employ  of  the  government,  or  in  the  service 
of  large  enterprises,  would  find  a  way  to  frame 
questions  which  would  bring  out  the  desired  in- 


160     THE  PASSING  OF  THE  TARIFF 

formation  or  would  force  conditions  which  would 
result  ultimately  in  the  people's  securing  the  in- 
formation essential  to  the  continuance  of  the  pro- 
tective sj^stem.  It  is  absurd,  economically  and 
politically^,  to  suppose  that  the  present  lack  of 
knowledge  of  the  working  of  the  protective  sys- 
tem will  be  tolerated  by  a  people  who  profess  to 
be  intelligent. 


CHAPTER  XI 
FREE-TRADE  PROTECTION 

President  Roosevelt's  espousal  of  the  right  of 
governmental  regulation  of  corporations,  with 
the  tremendous  popular  support  he  has,  bears 
directly  upon  the  tariff,  because  the  doctrine  which 
he  champions  raises  the  deeper  and  more  vital 
issue  of  the  self-service  of  the  people  through 
public  service  corporations  and  public  officials. 
In  the  nature  of  things,  that  cannot  but  help  to 
renew  the  strength  of  the  argument  for  infant 
industries.  At  the  same  time,  it  will  fail  to  bene- 
fit the  protectionist  side  as  much  as  would  ap- 
pear at  first,  because  it  logically  compels  the  con- 
clusion that  industries  shall  not  be  protected  when 
they  cease  to  be  infantile. 

Another  force,  which  is  already  powerful  and 
gains  in  strength  yearly,  which  makes  weight 
against  the  protection  doctrine,  is  the  constant 
and  energetic  effort  which  is  put  forth  by  busi- 
ness men  in  all  nations  to  overcome  the  obstacles 
of  time  and  space  wliich  stand  in  the  way  of  im- 
mediate and  thoroughgoing  exchange  of  goods, 
whereby  the  localities  which  have  the  best  natural 
equipment  for  production  shall  reap  the  full  ad- 
vantage of  their  commanding  situation,  as  far 
as  the  ingenuity  and  financial  resources  of  men 
have  been  able  to  annihilate  time  and  space.  This 
161 


163      iTHE  PASSING  OF  THE  TARIFF 

young  giant  in  the  arena  of  tariff  debate  will 
challenge,  in  the  coming  revision,  more  than  ever 
before,  the  entire  practice  of  the  United  States 
in  carrying  out  the  theory  of  protection  of  in- 
fant industries  by  means  of  an  obstruction  placed 
all  around  the  country  to  prevent  foreign  prod- 
ucts from  entering  upon  conditions  which  will 
enable  the  foreign  producers  to  undersell  the 
home  producers. 

Challenge,  therefore,  is  sure  to  be  made  to  the 
practice  of  tariff  duties,  while  there  need  be  no 
challenge,  for  the  sake  of  the  contest,  of  the  ar- 
gument that  infant  industries  should  be  pro- 
tected. The  challengers  can  stand  upon  the 
proposition  that  whatever  obstructs  the  free  in- 
terchange of  goods  between  countries  is  an  eco- 
nomic injury  to  all  the  countries  affected  by  the 
obstruction.  It  is  perfectly  consistent  for  a 
statesman  to  believe  in  the  theory  of  protection 
of  infant  industries,  but  to  hold  that  the  protec- 
tion should  consist  in,  a  subsidy  paid  directly 
from  the  public  treasury,  making  good  the  losses 
which  the  home  producer  suffers  from  foreign 
competition,  leaving  the  exchange  of  goods  be- 
tween his  own  and  other  countries  to  be  subject 
to  only  such  obstructions  as  the  ingenuity  and 
financial  resources  of  men  have  not  yet  overcome. 
Logically,  therefore,  a  man  can  be  a  free-trade 
protectionist,  and  the  term  "  free-trade  protec- 
tion "  involves  no  contradiction  whatever,  how- 


FREE-TRADE  PROTECTION        163 

ever  much  it  runs  counter  to  current  political 
usage. 

Strongly  plausible  reasons  can  be  urged  in  the 
coming  contest  for  holding  that  it  is  unstatesman- 
like  to  maintain  barriers  between  nations.  All 
of  the  ingenuity  and  effort  of  the  business  world, 
in  the  presence  of  natural  obstacles,  attacks  those 
obstacles  with  magnificent  spirit  and  hopefulness. 
Bigger  and  faster  passenger  steamships,  more  ca- 
pacious freighters,  telegraph  service  which  vexes 
even  electricity  itself  to  make  it  work  faster  and 
overcome  remaining  obstacles,  improvements  in 
the  preservation  of  perishable  goods,  better  busi- 
ness methods,  international  agreements,  demands 
for  uniform  weights,  measures  and  coinage,  and, 
finally,  a  friendly  way  with  the  new  world  lan- 
guage, Esperanto,  illustrate  completely  how  o^3- 
noxious  to  the  common  sense  of  the  entire  busi- 
ness world  is  the  idea  that  obstructions  are  them- 
selves helpful  to  local  prosperity.  Burden  of 
proof,  under  the  protest  of  the  common  business 
judgment  of  the  world,  rests  upon  those  who  hold 
that  business  prosperity,  even  in  the  long  run, 
can  be  promoted  by  the  erection  of  obstacles  to 
the  unimpeded  exchange  of  products,  wherever 
natural  conditions  make  exchange  profitable. 

Business  judgment,  it  is  evident,  falls  back 
upon  the  proposition,  which  does  not  require  much 
courage  to  maintain,  that  it  is  immaterial  what 
the  nature  of  the  obstruction  is,  so  long  as  it  is 


164      THE  PASSING  OF  THE  TARIFF 

something,  of  whatever  nature,  which  prevents 
tlie  exchange  of  goods  as  rapidly  as  would  occur 
if  the  obstruction  were  removed.  Whether  it  be 
time,  or  space,  or  mountains,  or  oceans,  or  ice, 
or  sandy  desert,  or  almost  impassable  forests,  or 
national  prejudice,  or  ignorance,  or  difficulty  of 
language,  or  lack  of  vehicles  of  transportation, 
or  lack  of  currency  as  a  means  of  transfers  of 
ownership,  or  lack  of  trust  in  the  good  faith  of 
men,  or  an  obstructive  tariff,  it  makes  no  differ- 
ence in  the  results  to  the  nations  between  which 
the  obstruction  exists,  as  far  as  the  consequences 
are  concerned.  Prevention  of  exchange  must, 
in  the  nature  of  the  case,  result  in  loss  of  the 
profits  of  the  exchange  which  would  occur  if  the 
obstiTjction  did  not  exist.  Upon  the  nature  of 
the  obstruction  depends  the  means  which  must  be 
employed  for  its  removal.  Other  important  in- 
cidents may  occur  in  connection  with  its  nature, 
but  it  may  be  set  down  as  an  axiom  in  exchange 
that  the  nature  of  the  obstruction  has  no  relation 
Avhatevcr  to  the  one  inevitable  consequence, 
namely,  loss  to  both  parties  between  whom  the 
obstruction  stands. 

Very  properly,  therefore,  while  the  term  "  pro- 
tection "  may  be  applied  to  the  encouragement  of 
infant  industry,  the  term  is  wholly  misplaced 
when  it  is  applied  to  a  tariff  which  puts  an  ob- 
struction in  the  way  of  exchange  of  goods  be- 
tween different  countries.  "  Obstruction  "  is  the 
only  correct  tenn,  and  our  so-called  protection- 


FREE-TRADE  PROTECTION       165 

ists  are  really  separated  into  two  classes ;  the  ob- 
struction protectionists  and  the  infant  industry 
protectionists,  who  do  not  approve  of  obstruc- 
tion. In  the  coming  contest  the  cleavage  which 
logically  exists  between  these  classes,  but  has  hith- 
erto not  been  revealed,  in  consequence  of  the  out- 
side pressure  of  politics  which  has  prevented  the 
split  from  showing  itself,  will  probably  gape 
wide  open  under  the  stress  of  the  new  contentions 
between  President  Roosevelt's  views  and  the 
Dingley  principles. 

Our  old  style  free  traders  still  have  the  floor 
to  demonstrate  that  it  is  unwise  policy  for  any 
government  to  adopt  the  industrial  infants  which 
would  make  it  their  foster  father.  Their  argu- 
ments have  pertinence  now  as  formerly.  Their 
facts,  statistics  and  theories  are  as  timely  as  they 
were  when  the  constitution  was  young  and  when 
forecast,  rather  than  hindsight,  was  the  main 
reliance  in  a  debate  in  congress.  But  the  un- 
questionable tendency  of  the  times  toward  mu- 
nicipal ownership  of  various  enterprises,  the  sup- 
port already  assured  to  governmental  ownership 
of  mines  and  railroads,  the  success  of  govern- 
ment enterprises  with  forests,  mails,  highways  and 
other  forms  of  self-service  by  the  people,  give 
a  new  force  to  the  old  argument  for  government- 
al support  until  an  enterprise  can  be  put  upon 
its  feet,  and  it  is  only  reasonable  to  predict  a 
change  of  front  on  the  tariff  battlefield. 

It  is  not  at  all  impossible  that  a  large  section 


166    THE  PASSING  OF  THE  TARIFF 

of  the  republican  party,  already  restless  at  the 
sight  of  loss  of  profits  which  seem  to  be  thrown 
away  foolishly  for  the  sake  of  maintaining  a 
false  theory,  will  break  away  from  the  obstruc- 
tion protectionists  and  declare  themselves  free- 
trade  or  low-tariff  protectionists,  in  the  expecta- 
tion of  gaining  the  great  profits  which  they  be- 
lieve to  be  lost  by  shutting  out  advantageous  ex- 
change of  goods,  while  they  would  insist,  with 
profound  loyalty  to  the  memory  of  Alexander 
Hamilton,  Henry  Clay,  Abraham  Lincoln  and 
Horace  Greeley,  that  they  were  still  true  friends 
of  the  infant  industries.  It  would  not  be  strange 
even  now,  if  a  majority  of  our  people  were  free- 
trade  protectionists,  if  they  should  analyze  their 
judgment  and  become  familiar  with  the  term. 

"  Protection  "  gets  half  of  its  strength  with 
the  voters  because  it  suggests  a  thing  which  ev- 
ery one  wants.  It  fits  in  with  our  fear  that  some 
one  else  will  get  our  job.  It  haraionizes  with 
out  Chinese  exclusion  law.  It  blends  with  the 
Califoraian  aversion  to  the  Japanese.  It  is 
friendly  with  the  enactment  against  the  importa- 
tion of  contract  labor,  even  if  it  occasionally  hits 
a  foreign  clergyman  or  a  symphony  artist.  It 
cuddles  and  smiles  and  makes  votes.  It  will  have 
a  new  fondness  for  industrial  infants,  but  it  will 
be  compelled  to  establish  anew  its  right  to  its 
name  in  connection  with  custom  house  duties. 

Evidently,  for  the  entire  people,  the  question 


FREE-TRADE  PROTECTION        167 

is  whether  the  present  system  really  protects  them 
all.  It  is  not  the  real  issue  whether  certain  in- 
terests wljich  are  allowed  to  tax  the  public  get 
enough  to  enable  them  to  continue  in  business, 
but  it  is  the  broad  proposition  whether  the  erec- 
tion of  an  obstruction  to  the  exchange  of  goods 
can  increase  the  prosperity  of  one  or  both  of  the 
parties  between  which  llie  obstruction  is  erected. 
Taking  all  things  into  consideration,  are  there 
more  profits  to  a  nation  with  or  without  obstruc- 
tions to  its  trade  with  other  nations  .f*  That  is 
the  issue.  It  does  not  concern  the  argument 
a  particle  to  admit  that  the  obstruction  theory 
may  be  worked  so  as  to  cause  more  profits  to  the 
classes  which  have  government  aid  in  taxing  the 
people  than  they  would  otherwise  have. 

The  question  for  the  entire  body  of  voters  to 
determine  is  whether  the  interests  which  profit  by 
the  obstruction  return  more  to  the  nation  than 
would  otherwise  be  made,  to  recoup  the  nation 
for  the  loss  which  the  obstruction  would  other- 
wise inflict. 

It  is  a  question  of  the  distribution  of  prod- 
ucts. Granted  that  certain  interests  are  better 
off,  is  there  as  much,  on  the  whole,  to  distribute 
to  all  the  people,  as  there  would  be  if  there  were 
no  obstruction?  To  answer  "yes"  involves  the 
doctrine  that  an  obstruction  tends  to  increase  the 
general  prosperity,  that  it  makes  larger  the  ag- 
gregate pile  of  goods  to  be  distributed,  and  that 


168     THE  PASSING  OF  THE  TARIFF 

obstructions,  in  and  of  themselves  as  obstructions, 
tend  to  increase  the  quantity  of  goods  to  be 
placed  at  the  service  of  mankind. 

The  proposition,  if  "  yes  "  is  the  right  answer, 
becomes  general  and  ceases  to  be  particular  as 
applied  to  the  duties  levied  at  a  custom  house.  If 
"  yes  "  is  the  correct  answer,  then  the  broader  the 
oceans  which  divide  the  nations,  the  higher  the 
mountains  which  separate  them,  the  smaller  the 
ships  which  can'y  their  passengers  and  freights, 
the  slower  the  mails  ( with  complete  disuse  of  elec- 
tricity as  a  means  of  information  ) ,  the  greater  the 
difficulties  all  around,  the  more  will  be  the  quan- 
tity of  goods  to  be  enjoyed  by  all  nations  in  the 
aggregate. 

In  the  end,  this  argument  finds  i^  only  out- 
come in  complete  national  seclusion,  in  the  sepa- 
ration of  our  states  from  their  relations  with  other 
states,  the  walling  up  of  our  towns  and  the  re- 
liance of  every  village  upon  itself,  if  not  every 
man  upon  himself,  for  the  production  of  every 
article  which  he  needs  to  keep  him  abreast  of 
these  times  when  a  well-educated,  well-dressed, 
well-fed  and  all-around  man  must  lay  even  the 
ends  of  the  earth  under  tribute  to  make  him  what 
he  must  be  to  keep  up  with  his  neighbors. 

Questions  raised  by  obstruction-protection,  be 
it  obser\'ed,  are  totally  distinct  from  those  raised 
by  the  problem  of  the  support  of  infant  indus- 
tries. In  the  latter  case  it  is  to  be  decided  whether 
it  will  pay,  both  financially  and  on  broad  grounds 


FREE-TRADE  PROTECTION       169 

of  national  independence  in  case  of  conflict,  for 
the  people  to  tax  themselves  for  a  time,  presum- 
ably not  so  long  that  the  end  is  not  predictable, 
while  the  object  of  protection  is  unable  to  sus- 
tain itself,  with  reasonable  assurance  that,  after 
it  becomes  self-supporting  it  will  more  than  re- 
turn to  the  nation  the  expense  which  has  been  in- 
curred on  its  account. 

First  of  all  the  conditions  of  protection  of  in- 
dustrial infants,  be  it  observed,  is  inability  of 
self-support.  If  the  enterprise  is  able  to  support 
itself,  it  needs  no  protection  and  the  proposition 
to  tax  the  public  for  its  aid  becomes  nothing 
more  than  a  bald  scheme  to  take  money  out  of 
the  pocket  of  the  public,  who  need  all  they  can 
get,  and  put  it  into  the  pockets  of  people  who 
have  no  pretense  of  needing  it  more  than  other 
taxpayers.  The  statement  of  the  situation  re- 
veals the  imperative  necessity,  in  order  that  the 
people  may  act  understandingly,  of  having  some 
public  and  official  means  of  knowing  when  an 
industry  of  the  infant  type  is  able  to  go  alone, 
in  order  that  its  artificial  aid  may  be  promptly 
cut  off. 

For  the  sake  of  granting  as  much  to  the  in- 
fant protector  as  he  can  reasonably  claim,  it  may 
be  conceded  that  many  considerations  enter  into 
the  case,  both  those  which  can  be  measured  in 
money  and  those  which  cannot  be  so  measured 
but  are  elements  in  the  life  of  a  community  or 
a  nation,   such  as   diversity   of   occupations,   in- 


170     THE  PASSING  OF  THE  TARIFF 

surance  against  calamity  to  any  one  interest,  the 
advantages  in  way  of  schools,  roads,  libraries, 
and  other  public  improvements  which  accrue  from 
the  presence  of  a  large  population.  It  is  not 
necessary  to  be  stingy  in  such  an  argument.  If 
the  protector  of  industrial  infants  insists  upon 
computing  these  things,  there  is  a  plausible 
ground  for  giving  them  due  consideration. 

But  all  of  these  plausibilities  combined  have  no 
necessary  connection  with  the  way  in  which  the 
public  aid  shall  be  given.  They  do  not  show 
whether  it  would  not  be  better  for  the  nation,  as 
a  whole,  to  take  the  money  directly  from  the  pub- 
lic treasury  than  to  take  it  by  charging  a  fee  for 
bringing  in  goods  from  other  countries.  ]\Iethod 
of  giving  aid  has  become  identified  in  our  popu- 
lar mind  with  the  fact  of  giving  it,  and  the  ef- 
fect of  obstructions  to  trade  has  been  overlooked, 
in  political  campaigning,  in  the  argument  that 
our  infants  still  need  shelter  from  the  blast  of 
foreign  competition,  forgetful  of  the  possibility 
that  it  might  be  cheaper  to  buy  them  a  wrap  with 
the  public  money  directly  than  to  erect  a  general 
obstruction  to  trade. 

It  is  practicable  to  protect  a  new  industry  di- 
rectly. The  determined  effort  for  years  to  se- 
cure the  passage  of  a  subsidy  bill  in  Congress 
illustrates  how  the  business  mind  turns  to  that 
proposition  when  a  customs  tariff  is  impractica- 
ble. First  of  the  conditions  for  protection,  as 
already  noted,  is  inability  of  self-support  under 


FREE-TRADE  PROTECTION        171 

natural  conditions.  Now,  money,  and  nothing 
else,  is  the  measure  of  the  lack.  If  money  is 
given  directly,  every  necessary  condition  of  pro- 
tection is  satisfied.  The  purpose  is  fully  accom- 
plished. The  process  of  protection  is  complete 
at  that  point.  The  entei*prise  is  put  upon  its 
feet  and  kept  there.  The  public  shares  in  the 
venture  to  the  extent  of  warranting  it  against 
competition  sufficiently  severe  to  reduce  its  own- 
ers below  a  reasonable  dividend  upon  their  in- 
vestment. The  public  steps  in  and  makes  up  to 
the  employees  enough  money,  in  default  of  the 
ability  of  the  owners  to  do  so,  to  maintain  a 
living  wage. 

More  than  this,  the  public  is  generous  to  a 
fault  to  the  protected  infant,  for  it  gives  this 
money  to  the  investor  and  to  the  employees  with- 
out any  assurance  that  the  investor  has  worked 
as  hard  or  has  shown  as  much  business  sagacity 
and  integrity  as  the  unprotected  investor,  and  it 
makes  up  to  the  employees  upon  the  openhanded 
sentiment  that  they  are  good  workers  anyway 
and  ought  to  be  well  paid.  If  the  infant  is  pro- 
tected by  direct  taxes,  it  is  not  necessary  to  ask 
whether  a  tariff  should  be  levied  upon  goods  of 
the  same  sort  from  abroad,  for,  with  the  insur- 
ance by  the  government  against  the  consequences 
of  foreign  competition,  the  tariff  question  need  not 
be  raised,  for  the  industry  will  stand  its  ground. 
By  means  of  the  money  given  from  the  public 
treasury  it  can  sell  as  low  as  its  foreign  rivals  and 


ITS     THE  PASSING  OF  THE  TARIFF 

its  prosperity  is  absolutely  secure  as  long  as  the 
public  will  pay  the  money  necessary  to  make  up 
the  deficit  of  income.  It  is  wholly  a  matter  for 
independent  determination  whether  the  desired 
protection  shall  be  given  by  means  of  a  direct 
subsidy  taken  from  the  public  treasury,  or  by 
the  device  of  putting  an  obstacle  in  the  way  of 
the  free  interchange  of  goods  between  the  country 
and  the  other  countries  of  the  world.  Legiti- 
mate trade  means  money-making,  or  the  creation 
of  substantial  wealth.  The  more  trade,  the  more 
wealth,  in  the  long  inin,  hard  times  and  good 
times.  It  would  therefore  be  money  in  the  pock- 
ets of  the  people  of  the  United  States  to  put 
every  protected  industry  on  the  sick  list,  pay  the 
deficits  from  the  public  treasury,  put  their  hands 
into  their  pockets  for  the  government  expenses, 
and  trade  to  the  full  wherever  on  the  face  of  the 
earth  the  most  money  could  be  made. 

Since  then,  the  protection  of  infant  industries 
can  be  separated  completely  from  the  levying  of 
customs  duties,  and  since  the  latter  practice  has 
strong  opposition  in  the  dominant  political  party 
in  portions  of  the  East  and  in  business  centers  in 
the  West,  it  is  to  be  expected  that  the  renewed 
effort  to  pass  a  bill  reducing  the  duties  will  per- 
sist until  something  has  been  accomplished.  If 
the  contest  were  broadened  in  scope  to  compre- 
hend the  entire  question  of  the  validity  of  the  ob- 
struction argument,  it  would  force  to  the  front 
the  problem  of  raising  sufficient  revenue  for  the 


FREE-TRADE  PROTECTION       173 

support  of  the  government.  In  view  of  the  fact 
that  more  than  half  of  the  government's  income 
is  raised  bj  the  customs  duties,  the  rejection  of 
the  obstruction  theory  as  a  positive  damage  to 
the  general  prosperity  would  require  the  bring- 
ing forward  of  some  substitute. 

But  that  would  merely  bring  into  national  fi- 
nances a  problem  which  is  already  urgent  in  state 
finances.  States  cannot  establish  custom  houses 
as  a  means  of  raising  their  revenue  and  the  taxa- 
tion problem  is  acute  in  some  of  them,  at  least,  as 
the  investigations  recently  made  in  New  York 
and  Massachusetts  prove.  It  is  not  pertinent  for 
the  obstruction  protectionists  to  raise  the  constitu- 
tional objection  that  direct  taxation  by  the  na- 
tional government  has  been  held  by  the  United 
States  supreme  court  to  be  unconstitutional. 
Financial  laws  and  policies  have  precious  little  re- 
gard for  man-made  constitutions  or  laws.  If  the 
United  States  were  an  old  man,  with  only  a  few 
years  longer  to  live,  or  if  the  earth  were  in  the 
decrepitude  of  age,  as  Professor  Percival  Lowell 
shows  Mars  to  be,  then  it  might  be  pertinent  to 
say  that  it  would  not  be  worth  while  to  disturb 
the  existing  order  of  things  for  the  few  remain- 
ing years  we,  as  a  nation,  had  to  live.  But,  since 
there  is,  for  practical  purposes,  as  far  as  we  can 
forecast  the  future,  as  much  time  coming  as  there 
has  time  gone  by,  measures  which  involve  a  con- 
stitutional amendment  are  as  fit  for  discussion  as 
those     which     are     already     permitted     by     the 


174f     THE  PASSING  OF  THE  TARIFF 

constitution.  Direct  taxes,  or  inheritance 
taxes,  or  heavier  interval  revenue  taxes,  especi- 
ally liquor  and  tobacco,  income  taxes  or  any, 
other  way  of  collecting  money  which  satis- 
fies the  demands  of  justice  and  expediency, 
whether  or  not  it  is  now  possible  under  the 
constitution,  may  properly  be  debated  as  an 
alternative  to  a  S3'stera  which  puts  a  serious 
obstruction  in  the  way  of  such  free  excliange  of 
commodities  as  the  common  sense  of  the  business 
world,  when  the  question  of  obstruction  is  con- 
sidered by  itself  alone,  affirms  to  be  an  unquali- 
fied evil. 

Obstructionists,  in  the  present  juncture,  con- 
sidering the  unanimity  of  the  business  judgment 
against  the  merits  of  obstructions  as  promoters 
of  prosperity,  may  be  properly  challenged  to 
come  into  the  forum  of  the  nations  and  prove 
that  they  are  right.  Though  they  have  that  pos- 
session now  which  may  be  nine  points  of  the  law, 
yet,  considering  the  advances  which  public  senti- 
ment has  made,  considering  the  modern  exertions 
to  remove  obstructions  of  whatever  sort,  it  is  per- 
tinent for  the  people  to  challenge  them  once  more 
to  prove  their  case  and  to  make  a  new  demonstra- 
tion that  the  business  judgment  is  wrong  and 
that  the  way  to  increase  the  total  quantity  of 
soods  to  be  distributed  is  to  increase  obstacles  to 
an  exchange  between  the  several  most  favored 
producers. 

Incidents   connected  with  the   obstruction   sys- 


FREE-TRADE  PROTECTION        175 

tern  have  weight  against  it,  in  addition  to  the 
damage  inflicted  upon  the  general  welfare. 
Though  it  is  true  that  the  activity  of  custom 
house  officials  in  politics  is  not  a  cause  of  com- 
plaint as  formerly,  especially  as  when  the  New 
York  situation  dominated  the  state  and  more,  and 
when  the  assassination  of  President  Garfield  was 
charged  to  the  excitement  due  to  the  system, 
yet  it  is  true,  even  now,  that  our  civil  service 
laws  are  enforced  only  by  constant  watchfulness 
against  politicians  who  are  ready  to  violate  them 
when  violation  seems  to  be  safe,  and  that  there  is 
always  danger  that  scandals  will  break  out  some- 
where in  the  custom  house  system.  That  is  a 
consideration  of  great  weight  in  view  of  former 
practices  and  it  always  counts  for  something  as 
an  inevitable  attendant  of  the  obstruction  policy. 

Again,  the  expense  of  maintaining  the  ob- 
struction system  is  no  small  count  against  it. 
The  line  of  custom  houses  around  our  borders, 
the  thousands  of  officials  and  employees,  the  de- 
lays and  vexations  to  trade,  the  actual  losses 
which  these  delays  cause,  all  these  make  a  finan- 
cial argument  of  no  small  force  against  continu- 
ing the  obstruction,  if  the  object  of  protection 
can  be  secured  in  another  way. 

Still  further,  there  is  the  moral  argument. 
And  this  is  no  small  consideration.  From  time 
out  of  mind,  down  to  the  present,  it  has  been  no- 
torious that  struggling  is  practiced  constantly 
and  with  the  sharpest  wits.     Perjury  seems  to  be 


176     THE  PASSING  OF  THE  TARIFF 

held  as  a  venal  offense  if  It  is  committed  against 
the  government  tariff  inquisitor  and,  if  current 
statements  which  seem  to  be  true  are  really  so,  the 
women  of  the  country  are  as  hardened  as  the 
men,  even  if  they  do  not  take  positive  pleasure 
in  a  game  of  cunning  with  those  whose  duty  it  is 
to  discover  frauds  upon  the  revenue.  These  evils 
are  chronic  and  are  recognized  as  great.  They 
are  briefly  mentioned  here  in  order  to  remind  one 
that  other  reasons  than  financial  have  weight 
against  the  obstruction  theory. 

But  the  time  seems  to  be  near  at  hand  when 
the  exigencies  of  the  situation  will  force  a  re- 
newed conflict  with  the  deliberate  obstruction  of 
trade,  since  it  has  no  necessary  connection  with 
the  principle  of  protection  for  infant  industries 
in  whose  name  it  makes  its  insistent  demand  for 
public  favor.  Business  common  sense  is  so  con- 
trary to  it  that  the  challenge  must  be  renewed, 
in  the  very  nature  of  things  and  the  obstruc- 
tionists will  be  compelled  once  more  to  show  how 
an  obstacle  to  the  exchange  of  goods  can  benefit 
one  or  both  of  the  parties  concerned.  Free  trade 
protection  may  be  a  popular  argument  for  those 
who  believe  in  favoring  infant  industries,  before 
the  coming  tariff  struggle  is  ended.  In  the  mean- 
time, and  until  the  obstructionists  can  demonstrate 
to  the  contrary,  it  is  pertinent  to  hold  that  the 
problem  which  they  set  before  the  country  of  so 
putting  an  obstruction  in  the  way  of  trade  that 
it  will  increase  the  quantit}^  or  value  of  goods  to 


FREE-TRADE  PROTECTION        177 

be  distributed  in  the  aggregate  (making  tlie  ef- 
fect of  their  action  depend  upon  their  intention, 
rather  than  upon  the  laws  of  trade  which  are  su- 
preme over  their  action  and  take  no  account  of 
their  intention),  is  precisely  like  the  old  sports- 
man's problem  of  how  to  shoot  at  the  thing  in 
the  bushes  so  as  to  hit  it  if  it  is  a  deer,  but  to 
miss  it  if  it  is  a  calf. 


CHAPTER  XII 

"  PROTECTION "      ILLUSTRATES      SUC- 
CESSFUL SELF-SERVICE 

With  all  due  respect  to  standard  writers  in  be- 
half of  the  theory  named  "  protection,"  the  af- 
firmation is  made  here  that  in  the  discussion  of 
obstruction  of  trade  for  the  alleged  benefit  of 
the  obstinictors,  two  distinct  facts  have  been 
tangled  together. 

When  an  enterprise  is  started,  business  men  do 
not  say  that  it  is  a  failure  if  it  does  not  return 
a  profit  from  the  beginning.  They  say,  and 
common  sense  says,  that  time  must  be  given  for 
it  to  get  upon  its  feet.  If  a  private  person, 
partnership,  or  corporation  starts  in  business, 
loses  money  for  a  while,  and  then  gets  upon  a 
permanently  paying  basis,  no  one  charges  failure. 
It  is  the  usual  course  of  business.  It  is  all  right 
that  the  money  should  be  risked.  It  is  to  be  ex- 
pected that  profit  will  not  accrue  immediately. 
The  risk  does  not  constitute  a  claim  to  be  helped 
by  the  public.  Nor  does  the  fact  of  immediate 
loss  give  the  investor  a  rightful  claim  upon  the 
public  treasury,  either  in  law,  in  morals,  or  in 
public  opinion.  The  investment  was  a  private 
affair,  and  the  fact  of  employing  a  large  num- 
ber of  men,  with  the  necessary  accompaniment 
of  building  up  a  village  where  they  dwelt,  or  of 
178 


SUCCESSFUL  SELF-SERVICE       179 

adding  to  the  population  of  a  city,  and  of  creat- 
ing or  enlarging  a  local  market  for  dry  goods 
and  garden  truck  constitutes  no  ground  for  a 
claim  upon  the  public  treasury.  If  the  principle 
be  conceded  in  the  case  of  one  industry,  it  ap- 
plies to  all  with  equal  force  and  fairness. 

Industries  which  have  been  permitted  to  take 
out  of  the  people  what  they  could  not  take  with 
an  open  market  have  prospered.  That  fact  has 
so  influenced  voters  in  the  United  States  that 
they  have  voted  repeatedly  to  continue  the  sys- 
tem. But,  if  they  will  think  twice  they  will  see 
that  the  theory  which  has  been  proved  to  be 
successful  is  not  that  the  quantity  of  goods  in  the 
world  is  increased  by  putting  obstructions  in  the 
way  of  trade,  but  that  when  the  entire  people 
back  up  an  industry,  it  can  succeed.  That  is  the 
extent  of  the  demonstration.  It  is  not  demon- 
strated by  the  permanent  continuance  of  pro- 
tected industry  that  the  wealth  of  the  world  has 
been  increased  by  the  artificial  interference  with 
trade.  When,  the  demonstration  is  rightly 
valued,  it  proves  that  the  self-service  of  the  peo- 
ple may  be  successful,  or  that  their  abounding 
productiveness  can  make  up  the  losses  in  one  de- 
partment by  the  gains  in  others.  But  no  accu- 
mulation of  facts  about  workmen  employed,  wages 
paid,  local  markets  created,  churches  built,  libra- 
ries endowed  and  any  amount  of  good  things  pro- 
duced out  of  the  gains  of  the  protected  industry 
can  constitute  a  demonstration  that  the  wealth  of 


180      THE  PASSING  OF  THE  TARIFF 

the  world  has  been  increased  by  the  obstruction 
to  trade.  All  that  can  possibly  be  proved  by  the 
most  profuse  display  of  benefits  from  a  protected 
industry  is  that  there  has  been  paid  for  the  prod- 
ucts of  the  industry  by  the  consumers  sufficient 
to  recoup  the  investors  for  their  outlay  and  to 
leave  a  margin.  But  there  cannot  be,  in  the 
very  nature  of  the  proposition,  a  demonstration 
that  more  Avealth  exists  than  there  would  have 
been  if  the  tariff  had  not  been  imposed.  Any 
alleged  demonstration  from  the  abundance  of  the 
seeming  benefits  is  of  no  account  as  long  as  the 
question  remains  unanswered  how  obstruction  to 
the  creation  of  wealth  can  create  wealth.  That 
is  the  one  point  to  be  cleared  up  and  no  figures 
of  gain  for  any  particular  industry,  or  for  any 
particular  locality  have  pertinence  to  the  real 
proposition.  All  that  is  demonstrated  by  arrays 
of  figures  and  pictures  of  corporation  and  munic- 
ipal prosperity  where  the  industry  is  located  is 
that  the  public  contributions  by  all  the  consumers 
of  the  goods  made  under  the  tariff  have  aggre- 
gated large  amounts. 

If  it  be  made  plausible  that  the  protected  in- 
dustry has  resulted  in  the  creation  of  more  wealth 
than  the  locality  or  the  country  would  have  en- 
joyed had  not  the  industry  been  started  at  all, 
then  it  is  not  proved  that  the  policy  of  obstruc- 
tion, 'per  se,  is  a  sound  theory  for  the  promotion 
of  wealth,  but  that  it  may,  under  some  circum- 
stances, be  profitable  for  the  public  to  engage  in 


SUCCESSFUL  SELF-SERVICE      181 

business.  The  obstruction  policy  cannot  be  suc- 
cessful if  the  obstruction  must  be  permanent. 
Taken  in  its  true  light  the  most  that  can  be 
proved  bj  the  success  of  any  protected  industry 
is  that  public  ownership,  or  public  management 
of  a  great  industry,  has  not  destroyed  the  ability 
of  the  people  to  continue  the  policy. 

Success  for  the  obstruction  policy  seems,  su- 
perficially, to  be  proved  by  the  plentifulness  of 
the  money  which,  in  some  cases,  is  poured  into  the 
treasury  of  the  industry  to  which  the  people  are 
forced  to  make  contributions.  But  the  constant 
agitation  of  the  question  will  certainly  bring  out, 
more  and  more  clearly  to  the  popular  mind,  the 
truth  that  the  obstruction  of  profitable  trading, 
which  is  really  a  destruction  of  wealth,  cannot 
add  to  the  general  prosperity.  Wherever  an  in- 
dustry has  really  been  helped,  by  public  aid,  to 
stand  upon  its  feet,  therefore,  it  is  so  much  of  a 
demonstration  of  the  ability  of  the  people,  under 
certain  conditions,  to  engage  in  business.  It  is 
true  that  the  direct  management  of  these  success- 
ful enterprises  has  been  in  private  hands.  No 
reports  to  the  public  have  been  demanded.  No 
accounting  for  the  funds  contributed  by  the  peo- 
ple has  been  attempted.  But  the  real  financial 
backer  has  been  the  public.  The  demonstration 
is  that  the  public  can  so  promote  a  business  at 
first  unprofitable  that  it  may  become  profitable, 
or  not  so  clearly  unprofitable  as  to  compel  the 
people  to  abandon  it. 


182      THE  PASSING  OF  THE  TARIFF 

Considering  the  tendencies  of  the  times  toward 
self-service  by  the  people,  this  demonstration  is 
sure  to  appeal  more  and  more  forcibly  to  the 
mass  of  the  people.  It  is  sure  to  be  taken  up 
with  more  and  more  urgency  by  the  political  lead- 
ers, even  by  demagogues,  and  it  promises  to  have 
wide  influence  in  future  national  campaigns  for 
the  election  of  members  of  Congress  and  of  the 
president.  The  principle  is  too  important  to  be 
neglected  and,  again,  it  is  evident  that  the  old 
order  of  things  has  passed  and  that  a  new  tar- 
iff era  is  here. 


CHAPTER  XIII 
TRADE-TAXATION  DESTRUCTIVE 

Both  sides  in  the  tariff  contest  agree  in  taxing 
trade.  Protectionists  tax  it  in  order  to  keep  for- 
eign goods  out  of  our  markets  so  that  home  prod- 
ucts may  have  a  better  field.  Revenue  tariff  men 
tax  it  in  order  to  raise  money  for  payment  of 
the  expenses  of  the  government.  In  opposition 
to  both  sides  the  proposition  advanced  here  is 
that  it  is  bad  pohcy  to  tax  trade  at  all,  whether 
for  protection  or  for  revenue,  but  that,  in  itself 
considered,  it  should  be  absolutely  free.  Justifi- 
cation of  a  tariff  for  revenue  lies  in  the  fact 
that  it  is  less  an  evil  than  a  tariff  for  pro- 
tection. But  it  obstinicts  trade  and  it  puts 
burdens  of  supporting  the  government  on  con- 
simiers  of  imported  articles,  burdens  not  shared 
by  other  people,  but  which  reduce  other  people's 
burdens  and  is  therefore  unjust. 

Trade  is  a  means  of  making  property.  To 
tax  it  is  a  partial  destruction  of  the  very  thing 
which  it  is  necessary  to  have  in  the  largest  quan- 
tity possible  in  order  that  the  burdens  of  the 
government  may  be  as  light  as  possible,  besides 
making  the  comforts  of  the  people  as  many  as 
possible. 

Both  taxation  for  protection  and  taxation  for 
revenue  are  open  to  the  just  criticism  that  they 
183 


18*     THE  PASSING  OF  THE  TARIFF 

prevent  the  production  of  property,  or,  what  is 
the  same  thing,  they  destroy  property.  Both 
should  be  abandoned,  and  taxation  for  revenue  is 
less  objectionable  than  taxation  for  protection 
only  because  tlie  injury  it  inflicts  upon  trade  is 
less  in  amount. 

These  are  the  fundamental  propositions  to  be 
made  convincing  to  the  people  of  the  United 
States  so  that  henceforth  they  will  not  attempt 
to  pay  the  expenses  of  their  government  by  a 
means  which  cripples  the  very  resources  whereby 
they  make  the  money  to  pay  these  expenses,  but 
will  make  trade  free,  so  that  property  may  be 
created  with  the  utmost  facility  and  thus  the  ex- 
penses of  the  government  be  paid  with  the  great- 
est possible  ease. 

Tliis  line  of  reasoning  makes  no  account  of  the 
great  expense  of  supporting  the  system  of  cus- 
tom houses  all  along  the  seaboard  and  on  our 
northern  and  southern  frontiers,  a  consideration 
which  is  entitled  to  the  exact  weight  of  its  cost 
in  the  argument,  upon  financial  grounds.  It 
makes  no  account  of  the  political  corruption  and 
twisting  of  politics  involved  by  the  presence  of 
custom  house  officials  in  national  concerns,  us- 
ing official  position  for  party  service.  Both  of 
these  arguments  are  justly  to  be  considered  upon 
the  negative  side  of  the  tariff  proposition,  whether 
the  duties  are  levied  for  protection  or  for  revenue 
only.  Plere  the  argument  is  raised  to  the  higher 
plane  of  the  unwisdom  of  the  taxation  of  trade 


TRADE-TAXATION  185 

under  any  consideration.  Trade  is  a  means  of 
making  property,  and  therefore  the  proposition 
is  not  only  that  it  is  bad  poHcy  to  tax  it,  but  it  is 
the  stronger  assertion  that,  no  matter  where  else 
taxation  may  fall,  trade  is  the  very  worst  place 
under  the  sun  for  it  to  be  imposed,  except  where 
money  is  made  faster  than  by  trading,  where 
taxes  would  be  more  crippling.  Government 
must  be  supported  and  property  must  be  taken 
by  compulsion  as  the  only  means  of  supporting 
it.  But  property  should  be  taken  after  it  is 
made,  not  during  the  making.  Encouragement 
to  the  fullest  extent  ought  to  be  given  to  the  mak- 
ing of  property,  and  if  those  who  have  such  a 
warm  corner  in  their  hearts  for  protection  could 
only  realize  that  this  is  really  the  proposition 
which  ought  to  have  that  snug  shelter,  then  our 
prosperity  would  increase  as  it  became  easier  to 
pay  our  taxes. 

This  is  our  proposition,  that,  with  absolute 
freedom  of  trade  all  over  the  world,  other  things 
being  equal,  there  would  be  the  most  rapid  crea- 
tion of  property  possible.  Profits  of  trade 
would  be  materially  larger  than  they  are  now. 
That  high  and  forbidding  wall  of  tariff  taxes, 
which  averages,  for  this  country,  about  half  of 
the  value  of  the  goods  imported  under  a  duty 
and  which,  in  some  cases,  rises  far  higher  in  pro- 
portion, and,  in  still  others,  is  at  a  prohibitive  fig- 
ure, would  be  leveled  to  the  earth  and  there  would 
be  only  the  obstacles  of  nature  to  forbid  the  ex- 


186      THE  PASSING  OF  THE  TARIFF 

change  of  goods.  Profits  of  trade  could  not 
help  being  much  higher  and  therefore  the  supply, 
of  the  people  of  the  nations  with  the  necessities 
and  luxuries  from  all  quarters  of  the  world  would 
inevitably  and  materially  increase  as  soon  as  the 
obstacle  of  the  tariff  were  removed  from  human 
sight.  Comfort,  enjoyment,  health,  education, 
pleasure,  travel  and  all  that  goes  with  larger 
measure  of  goods  would  be  shared  with  the  poor 
and  rich  alike.  A  positive  leap  forward  in  civili- 
zation would  be  made  the  moment  tariffs  were 
abolished  and  the  people  who  would  feel  the  relief 
most  keenly  would  be  the  poor  classes  who  must 
now  bear  the  burden  of  heavy  government 
charges  upon  the  necessities  of  life.  Mention  of 
the  tariff  on  wool  imposed  by  the  United  States 
is  enough  to  suggest  the  consequence  of  absolute 
free  trade  in  the  staple  in  raw  form  and  in 
every  variety  of  its  manufacture. 

Again,  all  the  taxes  which  are  necessary  to 
keep  in  operation  the  present  machinery  of  the 
custom  houses  for  the  collection  of  the  duties 
would  be,  by  so  much,  a  clear  addition  every  year 
to  the  wealth  of  the  world.  Prosperity  would 
be  widely  diffused  by  the  removal  of  the  dams 
Avhich  prevent  it  from  flowing  to  the  people  freely, 
almost  beyond  the  power  of  the  imagination  to 
conceive. 

Modern  civilization  develops  many  demands 
for  luxuries.  These  luxuries  are  brought  from, 
all  quarters  of  the  earth.     Business   men  pene- 


TRADE-TAXATION  187 

trate  to  remote  places  where  natural  treasures  are 
produced  under  the  most  favorable  circumstances. 
Steamship  lines  build  up  trade  with  people  of 
strange  languages  and  customs.  Our  home  mar- 
kets are  supplied  with  articles  about  whose  pro- 
duction we  are  ignorant  and  of  whose  origin  we 
know  almost  nothing.  Luxuries  become  necessi- 
ties. The  world  is  brought  together  into  one 
general  world  market.  Permanent  and  profitable 
trade  relations  are  established.  Every  locality, 
with  the  whole  world  for  its  market,  is  eager  to 
supply  the  world.  Each  special  manufacture  and 
each  agricultural  paradise,  where  nature  is  lavish 
for  one  particular  product,  each  rich  mineral  de- 
posit and  each  seashore  town,  visited  by  the  tribes 
of  the  sea  in  a  peculiar  magnitude,  concentrates 
its  attention  upon  what  it  can  supply  most  profit- 
ably and  which,  of  all  it  can  produce,  is  most  in 
demand.  Thereby  it  makes  the  largest  possible 
margins.  Exchanges  of  products  with  other  lo- 
calities, favored  by  nature  in  other  ways,  are 
promoted  where  they  are  impossible  under  tariff 
restrictions.  Wealth,  the  profit  of  legitimate 
trade,  increases  far  faster  than  is  possible  by  the 
restriction  of  the  process  of  creating  property  as 
freely  as  possible  and  each  and  all  communities 
reap  the  largest  possible  profit  with  the  smallest 
possible  outlay  of  muscular  exertion,  or  of  money 
invested  or  of  mental  effort  to  capture  and  hold 
a  satisfactory  market,  with  a  larger  guarantee 
of  a  permanency  of  conditions,  both  for  the  lo- 


188     THE  PASSING  OF  THE  TARIFF 

cality  which  produces  its  special  fabric,  crop  or 
metal,  and  for  every  other  locality  whence  it 
draws  its  other  supplies  in  exchange.  All  our 
talk  about  an  open  door  seems  very  small  and 
tame  in  the  presence  of  the  possibility  of  all  the 
markets  of  the  world  wide  open  at  all  times.  Yet 
the  first  condition  toward  securing  that  incalcula- 
bly profitable  world-wide,  permanent,  open  mar- 
ket is  that  we  show  ourselves  ready  to  buy  any- 
where in  the  world  where  we  can  buy  most  cheaply. 
Nobody  can  force  us  to  buy.  But,  with  un- 
trammeled  markets,  our  buyers  would  give  their 
orders  anywhere  on  earth  where  they  found  the 
goods  of  the  best  quality  and  at  the  lowest  prices. 

Under  such  conditions,  world  prosperity  would 
go  forward  as  it  has  never  yet  done  in  all  the 
history  of  international  trade.  Property  would 
be  created  far  faster,  and  in  a  perfectly  honest 
and  legitimate  way,  than  can  ever  be  possible 
where  trade  is  taxed,  thereby  suffering  a  serious 
obstacle  in  the  way  of  its  creation. 

It  has  been  laid  down  as  a  principle  of  taxa- 
tion that  taxes  should  be  levied  where  they  can 
be  borne  most  easily.  Somehow,  in  the  practical 
application  of  that  wholesome  axiom,  it  has  been 
assumed  that  money  in  business  is  in  the  most 
advantageous  position  for  sparing  a  part  of  it- 
self to  the  tax-gatherers.  But  that  application 
is  here  vigorously  disputed  as  unreasonable  and 
destructive  of  the  production  of  wealth.  On  the 
contrary,  the  true  proposition  is  that  the  easiest 


TRADE-TAXATION  189 

way  to  bear  taxes  is  to  have  as  much  property  as 
possible  wherewith  to  pay  them  and  the  only 
reasonable  way  to  get  all  property  possible,  hon- 
estly, is  to  remove  every  removable  obstruction  in 
the  way  of  the  creation  of  property. 

It  is  generally  admitted,  and  it  is  easily  seen 
that  each  party  to  a  bargain  gains  by  the  trans- 
action. Otherwise  neither  would  make  a  trade. 
After  the  exchange  each  is  better  off  than  before. 
There  is  more  wealth  in  the  community  when 
property  is  in  the  hands  of  the  consumers  than 
before  it  is  distributed.  In  order  to  pay  taxes 
most  easily,  therefore,  all  property  that  can  pos- 
sibly be  made,  honestly,  should  be  made.  After 
it  is  made,  then  let  the  tax  collector  take  for  the 
support  of  the  government  such  as  is  necessary. 
But  open  every  door  of  trade.  Take  off  every 
burden.  Let  ships  sail  the  sea  wherever  their 
owners  think  they  can  find  a  profitable  cargo. 
Let  steamers  come  to  our  wharves  loaded  with  the 
goods  of  foreign  countries,  bought  in  as  large 
quantities  as  our  needs  require  and  as  near  the 
spot  of  production  as  possible,  on  the  lowest 
terms  possible.  Let  no  custom  house  officer  try 
to  cut  off  the  profits  which  the  importer  should 
have  as  the  reward  of  his  venture.  Let  the  goods 
be  distributed  to  the  people  who  want  them 
as  widely  as  possible  and  as  freely  as  the 
price  of  production  and  the  cost  of  transporta- 
tion will  permit.  Remember  that  the  value  of 
imported  goods  increases  at  every  step  of  their 


190      THE  PASSING  OF  THE  TARIFF 

distribution  till  they  are  upon  the  table  of  the 
consumer.  When  they  represent  the  utmost 
wealth  of  which  they  are  capable,  when  the  com- 
munity is  enriched  by  them  to  the  full  amount, 
then  let  the  taxes  be  put  upon  property  in  such 
way  as  wisdom  dictates,  but  not  before  the  full 
development  of  the  property  has  been  reached. 

So  it  should  be  with  our  exporters.  Let  them 
have  full  swing  with  their  foreign  trade.  Let 
the  ports  of  the  world  be  open  to  them:  The 
more  they  sell,  the  more  they  have.  Then,  when 
their  returns  have  been  reaped  from  their  ven- 
tures, when  the  wealth  of  trading  is  fully  worked 
out,  let  the  burden  of  taxation  be  put  upon  the 
property.  Then  the  government  gets  its  full 
share,  as  thoroughly  as  by  the  restriction  of 
trade,  but  the  taxpayer,  having  greater  abun- 
dance for  the  payment,  has  a  larger  quantity  left 
and  is,  therefore,  better  off.  Larger  private 
means  would  mean  a  stimulus  to  further  trade, 
as  well  as  larger  enjoyment  of  the  necessities  and 
comforts  of  life.  It  is  a  reasonable  proposition, 
making  due  account  for  extravagance  and  fool- 
ishness, that  the  larger  part  of  the  additional 
wealth  would  be  spent  reasonably.  The  real 
wealth  of  the  people  would  be  increased.  There 
Avould  be  an  upward  movement  in  the  substantial 
of  civilization  which  would  not  be  possible  with- 
out the  wealth  created  through  free  trade,  over 
and  above  what  could  have  been  produced,  even  by 
greater  effort,   under   the   policy   of   deliberately 


TRADE-TAXATION  191 

preventing  trade.  Unless  tlie  objector  is  pre- 
pared to  maintain  the  proposition  that  property 
is  not  created  by  the  mere  fact  of  trading,  there 
is  no  escape  from  this  conclusion,  and  the  man 
who  maintains  that  position  sets  himself  against 
the  universal  testimony  of  the  world  and  against 
the  common  sense  of  everybody  who  ever  struck 
a  bargain  or  made  a  purchase  of  any  sort  what- 
ever. 

An  unexpected  indorsement  of  the  proposition 
that  trade  should  not  be  taxed  is  found  in  the 
official  report  of  the  JNIassachusetts  recess  commis- 
sion on  taxation  of  1907,  made  to  the  legislature 
of  1908.  In  connection  with  the  discussion  of 
the  proposition  to  tax  transfers  of  stocks  and 
with  mention  of  the  fact  that  New  York  state  de- 
rives a  revenue  of  several  millions  a  year  from 
such  a  tax,  the  commission  says  that  it  is  "  of 
the  opinion  that  in  ordinary  times  it  is  unwise  to 
place  a  tax  upon  commercial  or  financial  transac- 
tions." This  opinion  is  unanimous,  yet  some 
who  signed  it  are  protectionist  republicans. 
This  revelation  of  the  clearness  with  which  they 
see  a  truth  when  the  colored  glass  of  partisan- 
ship is  not  before  their  eyes  is  highly  encourag- 
ing. 

It  is  not  affirmed  here  that  manufactures  should 
be  upset  suddenly  in  order  to  establish  the  ideal 
conditions  for  the  creation  of  property,  any  more 
than  it  is  proposed  by  tariff  reformers  to  give 
no  time  for  turnino;  around  to  those  who  would 


192     THE  PASSING  OF  THE  TARIFF 

be  affected  by  the  change.  But  it  is  affirmed 
that  when  the  true  ideal  is  seen  no  time  should  be 
lost  in  adopting  the  right  principle  and  making 
it  operative  as  soon  as  practicable. 

In  the  process  of  taking  off  the  tariff  taxes 
which  destroy  property  and  prevent  the  creation 
of  property,  it  is  quite  probable  that  a  tariff  for 
revenue  would  be  the  most  practicable  avenue  of 
reaching  the  conclusion.  But,  Avith  the  under- 
standing that  the  policy  was  temporary  and  was 
the  best  way  of  reaching  the  desired  end,  such  a 
policy  would  be  justifiable  and  could  honestly  ap- 
peal to  the  voters  of  the  country  for  support. 
It  would  give  time  for  the  adjustment  of  manu- 
factures from  the  unAvise  stimulation  which  set 
them  up  in  violation  of  the  natural  conditions 
and,  if  there  be  any  truth  in  the  affirmation  that 
a  tariff  prevents  the  exchange  of  goods  (which 
is  admitted  and  affirmed  by  both  parties  in  the 
controversy),  then  the  increased  exchanges  and 
the  gradual  approach  to  natural  conditions, 
when  obstacles  would  be  reduced  to  a  minimum, 
would  point  the  way  to  further  progress  in  the 
same  direction,  until  the  goal  was  reached  and 
trade  was  as  free  as  possible  under  the  limitations 
of  time,  space,  race,  language,  customs  and  in- 
ternational distrust.  The  change  would  have 
been  made  by  evolution  and  not  by  revolution. 


CHAPTER  XIV 
THE  DEPRESSION  OF  1907 

For  a  time  as  long  as  a  majority  of  the  peo- 
ple of  the  United  States  will  remember  the  fact, 
the  depression  of  business  which  began  in  1907 
will  be  a  cause  of  weakening  the  confidence  of  the 
voters  in  the  tariff  system.  That  this  depression 
occurred  when  it  did  was  of  large  public  im- 
portance. It  came  upon  the  country  when  busi- 
ness was  exceptionally  prosperous.  The  lowest 
depth  of  the  stock  market  was  touched  in  the 
autumn,  just  when  there  was  full  assurance  of 
good  crops  successfully  harvested.  Our  great 
staples  were  abundant  in  quantity  and  good  in 
quality.  Neither  drouth  nor  flood  had  materially 
affected  the  plenteous  return.  Insect  pest  and 
blight  had  not  been  unusually  destructive. 
Manufacturing  was  in  full  swing.  Orders  were 
booked  far  ahead  of  the  capacity  of  the  mills  to 
fill.  Wages  were  on  the  up  grade.  The  sky  was 
clear  of  foreign  complications  and  the  presiden- 
tial election  was  too  far  off  to  be  given  as  a 
reasonable  excuse  for  the  calamity.  Yet  it  came 
with  ovenvhelming  force.  In  some  respects  it 
exceeded  that  of  1893  and  was  paralleled  only  by 
that  of  1873. 

Its  significance  as  tending  to  a  permanent  dis- 
crediting of  the  tariff  lies  in  its  coming  in  a 
193 


194.     THE  PASSING  OF  THE  TARIFF 

republican  administration.  It  is  impossible  to 
consider  the  case  fairly  without  mention  of  par- 
tisan politics,  but  the  effort  will  be  made  to  con- 
sider it  so  impartially  as  not  to  be  open  to  par- 
tisan criticism.  In  1893  the  financial  disaster 
broke  with  all  its  force  in  the  spring,  only  a 
short  time  after  the  inauguration  of  the  demo- 
cratic administration  of  President  Cleveland  fol- 
lowing the  republican  administration  of  Presi- 
dent HaiTison.  "  Post  hoc,  ergo  propter  hoc  " 
was  the  argument  from  that  time  on,  till  the  de- 
pression of  1907,  with  which  republican  and  pro- 
tectionist writers  and  speakers  always  referred  to 
that  financial  storm.  Even  down  to  the  month 
of  the  worst  stock  conditions  of  1907  a  high 
protectionist  publication  kept  up  its  afiirma- 
tion  —  and  perhaps  holds  its  opinion  still  —  that 
it  was  in  consequence  of  the  democratic  victory 
of  1892  and  the  inauguration  of  President  Cleve- 
land March  4,  1893,  that  the  crash  immediately 
afterward  overtook  the  financial  and  industrial 
world. 

It  is  a  fact  that  this  argument  that  the  crasli 
came  after  the  democratic  victory  and  was  there- 
fore caused  by  that  victory  was  sufficient  to  turn 
many  voters  of  the  democratic  ticket  in  1892  to 
the  republican  side  permanently,  at  least  till 
1907,  even  though  the  Wilson  tariff  reduction 
bill  was  not  passed  till  much  later  than  March, 
1893.  In  1892  prices  were  high.  Necessities  of 
Hfe  cost  heavily.      General  complaint  was  loudly 


THE  DEPRESSION  OF  1907        195 

made  against  the  tariff  and  the  sweeping  demo- 
cratic victories  followed.  After  the  crash  came 
the  temptation  was  too  strong  to  resist  and  re- 
publican politicians  made  the  most  of  their  op- 
portunity to  put  the  blame  upon  the  democrats. 
Let  it  be  conceded  that  most  of  them  did  this 
either  honestly  or  in  ignorance  of  the  laws  of 
finance,  simply  from  the  politician's  practice  of 
turning  every  possible  point,  whether  rightly  or 
not,  against  his  opponent. 

After  the  crisis  of  1893  the  democratic  leaders, 
not  equal  to  the  task  of  challenging  republican 
assertions  and  proving  them  to  be  unfounded, 
abandoned  the  issue  and  the  country  was  swept 
by  the  silver  wave  of  1896  and  1900,  while  the 
tariff  was  as  dead  politically,  for  the  time,  as 
the  rag  baby  issue  of  the  late  seventies.  Follow- 
ing the  McKinley  tariff  came  the  Dingley  tariff 
with  the  highest  rates  ever  known  to  the  country. 
Protectionists  made  the  most  of  their  opportunity 
after  the  repubhcan  press,  with  the  apparent 
backing  of  the  entire  manufacturing  and  finan- 
cial interests  of  the  country,  had  united  in  de- 
nunciation of  the  revenue  theory  of  the  tariff  and 
had  saddled  all  the  financial  evils  of  the  times 
upon  the  democratic  party,  although  the  Wilson 
bill  had  been  so  far  mangled  by  the  manipula- 
tion of  protection  democrats  that  President  Cleve- 
land refused  to  sign  it  and  let  it  become  law  with- 
out his  approval.  All  vitality  of  the  tariff  issue 
had  departed  and  protectionism  had  its  full  and 


196     THE  PASSING  OF  THE  TARIFF 

perfect  work.  Dingley  prosperity  satisfied  the 
laboring  men  who  had  been  frightened  from  their 
position  in  1893.  No  head  could  be  made 
against  the  facts  of  rising  prosperity,  and  the 
nation  which  leams  that  the  fire  is  hot  only  by 
burning  its  fingers  waited  once  more  for  its  les- 
son, all  the  while  asserting  that  at  last,  with  the 
Dingley  tariff,  it  had  passed  beyond  the  period 
of  crashes  and  that  henceforth,  for  an  indefinite 
future,  prosperity  was  assured. 

Such  is  a  fair  recital  of  the  succession  of  events 
and  of  the  state  of  mind  among  party  leaders 
and  among  the  mass  of  voters.  Republican  ad- 
ministration was  synonymous  with  prosperity. 
People  felt  sure,  as  long  as  a  supporter  of  the 
Dingley  tariff  was  at  the  head  of  the  executive 
department  and  as  long  as  a  republican  and  pro- 
tectionist Congress  was  at  the  head  of  the  legis- 
lative department,  secure  in  both  branches,  that 
trouble  could  never  come.  Many  were  the  voters 
who  accepted  as  Bible  tiniths  the  assertions  that 
democracy  was  synonymous  with  disaster  and  that 
republican  supremacy  insured  constant  employ- 
ment with  high  wages. 

Therefore  it  is  a  political  event  of  large  im- 
portance that  the  demonstration  of  the  false- 
ness of  the  politicians'  assertions  was  made  in  a 
republican  administration,  when  all  the  agricul- 
tural and  manufacturing  and  political  condi- 
tions were  favorable  and  when  not  the  most  In- 
genious   politician    could    possibly,    put    the    ex- 


THE  DEPRESSION  OF  1907       197 

planation  upon  the  democrats  plausibly  enough 
to  convince  even  a  stupid  voter.  This  financial 
catastrophe  demonstrates  to  the  people  that  there 
are  financial  laws  and  that  those  laws  are  not 
conjured  with  by  the  mere  mention  of  a  party 
name,  as  if  "  republican  "  or  "  democrat  "  were 
a  magical  word,  acting  without  reason  or  force 
behind  it  to  upset  the  mighty  forces  of  the  busi- 
ness world.  Henceforth,  as  long  as  the  majority 
remembers  this  crisis  of  1907,  voters  must  have 
some  reason,  beyond  the  mere  mention  of  a  party 
name,  to  explain  a  financial  event.  Henceforth 
the  name  of  McKinley  or  Dingley  will  not  be 
synonymous  with  almighty  power  over  the  realm 
of  business,  but  the  existence  of  forces  inde- 
pendent of  verbal  formulas  will  be  admitted. 
The  voters  will  demand  truth,  not  blind  appeals 
to  partisanship.  Therein  lies  part  of  the  signifi- 
cance of  the  renewed  hostility  to  the  tariff. 


CHAPTER  XV 

TWO  INCOMPATIBLE  POLICIES 

Our  servants,  the  office-holders  at  Washington, 
have  a  practice  of  publishing  consular  reports  in- 
forming the  business  men  of  this  country  of  ap- 
parently profitable  openings  abroad  for  trade. 
Our  lynx-eyed  representatives  in  hundreds  of  for- 
eign cities  study  the  market  conditions,  the  equip- 
ment and  the  practices  of  the  manufacturers  un- 
der their  observation,  the  tastes  of  the  people 
among  whom  they  mingle,  the  relative  cost  of 
manufacture  and  transportation,  and  the  needs  of 
certain  supplies  and  write  to  their  superiors  at 
Washington  what  they  believe  would  be  good 
business  policy  for  exporters  of  United  States 
products,  or  investors  of  capital  from  the  United 
States.  Government  resources,  that  is,  the  money 
of  the  people,  is  spent  in  order  to  develop  our 
trade  with  other  countries,  and  this  is  universally 
accepted  as  sound  business  policy  and  as  within 
the  legitimate  scope  of  the  government.  Such 
action  comes,  of  course,  under  that  theory  of  the 
government  which  regards  the  administration  as 
the  servant  of  the  people  to  promote  their  busi- 
ness prosperity,  as  well  as  their  political  stability 
and  to  secure  peaceful  relations  with  foreign 
powers.  Whatever  fault  critics  may  find  with 
that  theory  of  government  is  not  our  concern 
198 


INCOMPATIBLE  POLICIES       199 

here.  We  have  to  consider  the  theory  in  its  re- 
lation to  the  accepted  policy  of  the  obstruction 
of  trade  for  the  supposed  prosperity  of  the  en- 
tire countr}',  including  the  general  public,  as  well 
as  the  favored  interests  directly. 

It  must  be  accepted  as  a  fair  statement  of  the 
purpose  of  the  tariff  policy  that  it  is  to  promote 
the  business  prosperity  of  the  whole  country. 
It  is  further  absolutely  fair  to  say  that  the  pro- 
tection theory  requires  duties  to  be  imposed  upon 
competitive  products.  It  is  further  absolutely 
fair  to  say  that  the  tariff  would  not  be  required 
for  the  shelter  of  our  manufacturers  if  we  could 
produce  them  more  cheaply  than  foreign  prod- 
ucers. These  are  perfectly  simple  and  admitted 
proportions,  but  it  is  pertinent  to  mention  them 
here  in  order  to  get  our  bearings  correctly. 

Now,  to  put  one  of  these  propositions  in  other 
words,  the  foreign  producer  can  produce  his 
goods  and  put  them  upon  our  markets,  in  the  ab- 
sence of  the  tariff,  cheaper  than  they  can  be  pro- 
duced here.  He  has  a  natural  advantage. 
Those  goods  are  the  kind  which  he  can  produce 
with  the  most  profit.  It  would  be  most  for  his 
prosperity  if  he  could  engage  in  that  line  of 
production  as  extensively  as  possible,  for  in  it 
he  could  make  his  largest  profits,  and  then,  with 
those  profits,  he  would  buy  other  things  which 
he  must  have.  This  is  so  plain  as  to  secure,  of 
course,  the  concurrence  of  every  tariff  supporter. 

But  our  tariff  aims  to  exclude  from  our  mar- 


200      THE  PASSING  OF  THE  TARIFF 

kets  these  goods  upon  which  the  foreigner  can 
make  his  largest  profit.  That  is,  our  tariff  is  a 
severe  blow  right  in  his  face.  It  is  an  act  o^f 
commercial  hostility,  with  the  financial  side  of 
which  we  are  at  this  moment  concerned.  If  we 
cut  him  off  from  making  his  largest  profits,  we 
reduce  tliercbj  his  ability  to  buy  of  us.  That 
must  be  very  evident.  Without  obstructions,  he 
could  lay  his  goods  upon  our  counters  and 
would  be  able  to  buy  our  goods  in  return.  But 
by  just  as  much  as  we  prevent  his  making  such 
profits  as  he  might  make  were  it  not  for  our  ob- 
struction to  his  trade,  by  so  much  do  we  cut  off 
ourselves  from  selling  to  him.  He  is  absolutely 
poorer  because  of  our  action,  unless  he  can  find 
another  market  equally  profitable.  But  other 
countries  believe  also  in  the  obstruction  policy 
and  such  other  market  is  closed. 

It  is  the  theory  of  our  tariff  that  by  it  we  are 
promoting  the  general  welfare,  not  particularly 
that  of  any  one  or  any  few  manufactures. 
Therefore  it  is  not  a  sufficient  reply  to  say  that 
certain  manufactures  in  our  country  are  profited 
by  the  obstruction,  while  there  are  plenty  of  peo- 
ple in  other  parts  of  the  world  than  the  foreign 
manufacturer  of  the  competing  product  who  are 
not  made  poorer  by  our  policy  and  who,  there- 
fore, are  still  able  to  buy.  If  we  destroy  a  good 
customer,  wherever  he  is,  then  we  have  injured 
our  foreign  market  by  so  much.  Still  further, 
if  people  in  otlier  parts  of  the  world  have  been 


INCOMPATIBLE  POLICIES      201 

forced  to  buy  from  us,  by  reason  of  our  crippling 
the  foreign  producer,  so  that  they  have  to  pay 
a  higher  price  than  they  would  otherwise,  then 
we  have  crippled  other  foreign  buyers,  as  well  as 
the  competing  manufacturer.  It  is  a  fair  pre- 
sumption that  the  man  with  the  most  advantage, 
making  the  largest  output,  could  do  his  whole- 
sale business  so  as  to  give  all  customers,  both 
ourselves  and  other  nations,  the  lowest  prices. 
Therefore,  since  we  reduce  his  wholesale  trans- 
actions, we  injure  third  parties,  as  well  as  the 
manufacturing  foreigner,  the  second  party,  to 
say  nothing  about  ourselves  as  the  party  of  the 
first  part. 

In  regard  to  what  happens  to  ourselves,  it  is 
not  necessary  here  to  write.  That  is  familiar 
ground.  It  constitutes  the  principal  reason  why 
we  should  abandon  the  policy  which  cuts  us  off 
from  a  supply  of  our  needs  cheaper  than  we  can 
supply  themselves.  But  the  argument  is  none  the 
less  sound  because  it  is  familiar.  Truth,  though 
stale  and  unpopular,  is  just  as  resistless  as  when 
it  is  first  discovered  and  it  can  be  relied  upon 
just  as  implicitly  and  supremely  to  work  its  full 
retributive  justice  and  penalties  upon  those  who 
have  contempt  for  it  or  who,  in  ignorance,  defy 
it.  Noting  this,  there  is  no  occasion  to  dwell 
upon  what  is  familiar.  Its  soundness  and  its  per- 
tinence are  sufficient  mention  while  we  pass  to  the 
second  part  of  the  main  subject. 

Now,  as  to  the  foreigner  whom,  we  have  shut 


20^     THE  PASSING  OF  THE  TARIFF 

out  of  a  profitable  market,  careless  or  even  de- 
lighted if  we  cause  him  to  suffer  loss  and  miscal- 
culating the  effect  upon  ourselves  of  our  own 
policy.  Having  got  him  where  we  want  him, 
commercially  speaking,  as  a  competitive  producer, 
we  proceed  to  advertise  our  goods  to  him.  We 
send  our  agents  there  to  introduce  our  manufac- 
tures. We  do  all  we  can  to  develop  our  foreign 
markets.  We  instruct  our  official  representatives 
to  send  us  what  infomiation  they  can  gather 
about  the  openings  for  business  and  we  act  as  if 
we  would  like  to  promote  closer  business  relations 
with  them. 

Does  any  tariff  man  recollect  the  delegation 
from  Argentina  which  came  to  this  country  a 
few  years  ago?  We  had  trade  representatives 
there  who  saw  the  great  opportunities  for  profit- 
able exchange  of  products.  Argentina  is  a  pro- 
lific producer  of  hides  and  wool,  two  articles 
which  are  in  large  and  constant  demand  in  our 
country.  These  men  from  Argentina,  the  very 
flower  of  their  business  representatives,  came  here 
on  their  errand  of  promoting  friendliness  and 
better  trade  relations  between  the  two  countries, — 
"  sister  American  republics,"  as  we  were  lovingly 
called.  They  were  welcomed  in  New  York,  Bos- 
ton and  elsewhere  by  boards  of  trade  and  similar 
organizations.  Elaborate  speeches  of  welcome 
and  of  fine  hopes  were  made  to  them  at  sumptu- 
ous banquets  at  flower-bestrewn  tables.  The 
hand  of  brotherhood  Avas  lield  out  to  them  and 


INCOMPATIBLE  POLICIES        203 

it  seemed  as  if  the  visitors  and  their  hosts  were 
personally  about  ready  for  the  millennium,  what- 
ever was  true  of  those  who  did  not  attend  the 
receptions.  Rounds  were  made  from  city  to  city, 
welcomes  were  given,  hopes  held  out,  farewells 
were  said.  Then  came  the  sequel,  the  utter  blast- 
ing of  every  hope  of  the  representatives  of  Argen- 
tina, the  refusal  to  make  an  inch  of  concession 
of  the  duties  on  wool  and  hides  and  the  millen- 
nium took  up  its  etymological  meaning  of  a 
thousand  years  off  —  if  that  be  its  meaning. 

More  than  that,  one  of  our  merchants,  per- 
sonally acquainted  with  some  of  the  visitors  from 
long  residence  in  their  country,  learned  from  them 
that  they  felt  very  bitter  over  the  outcome,  as 
if  they  had  been  deluded  and  slapped  in  the  face. 
That  emphasizes  a  feature  of  our  treatment  of 
the  foreign  producers  other  than  the  commercial 
by  our  high  tariff,  and  that  is  the  mental  conse- 
quence. Psychology  operates  as  well  as  dollars 
in  these  contests.  If  we  hit  a  foreigner  hard, 
even  in  careless  selfishness,  looking  out  for  only 
Number  One,  then  he  feels  injured.  But  if  we 
add,  as  we  certainly  do,  the  element  of  satisfac- 
tion over  his  discomfiture  in  consequence  of  our 
hostility,  then  he  feels  enmity  in  consequence. 
This  is  only  human  nature,  and  this  is  one  of  the 
consequences  which  we  must  be  prepared  to  recog- 
nize. Mutual  injury  of  nations  by  means  of 
trade  restrictions  tends  to  promote  not  only  com- 
mercial warfare,  but  hostile  political  and  diplo- 


204     THE  PASSING  OF  THE  TARIFF 

matic  relations.  Plenty  of  evidence  of  this  is 
seen  every  year  in  our  relations  with  foreign 
powers,  and  the  development  of  feeling  toward 
Germany  in  some  quarters,  whether  or  not  it  has 
reached  a  point  of  appreciation  in  the  department 
of  state,  shows  its  effect  upon  public  sentiment, 
and  public  sentiment,  when  ripe  and  strong,  is 
sure  to  influence  the  department  of  state.  Tar- 
iff hostility  is  an  edged  tool  which  ought  not  to 
be  trifled  with. 

No  better  unofficial  instance  of  the  apprecia- 
tion by  our  business  men  of  the  necessity  of  pro- 
moting our  foreign  trade  can  be  given  tlian  the 
"  national  convention  for  the  extension  of  the 
foreign  commerce  of  the  United  States."  It 
was  held  in  Washington,  beginning  January  14, 
1907,  and  the  invitations  were  issued  by  a  spe- 
cial committee  of  the  New  York  Board  of  Trade 
and  Transportation.  The  first  name  in  the  cir- 
cular is  that  of  Cornelius  N.  Bliss,  well  known 
both  for  his  political  record  as  a  member  of  Pres- 
ident McKinley's  cabinet  and  as  a  New  York 
business  man,  and  therefore  he  is  a  peculiarly 
representative  person.  Each  governor  of  a  state 
was  invited  to  appoint  ten  delegates  and  there 
was  a  large  representation  of  trade  organiza- 
tions. The  invitation  contained  this  significant 
passage : 

"  The  obstacles  which  have  hampered  our  efforts 
to  develop  the  conjinerce  of  the  United  States  with 


INCOMPATIBLE  POLICIES       205 

foreign  countries  are  evident  to  everyone  familiar 
with  that  trade.  That  those  obstacles  should  be 
removed  at  the  earliest  possible  moment  is  unques- 
tioned if  we  are  to  attain  pre-eminence  instead  of 
remaining,  as  we  are,  far  in  the  rear  in  the  struggle 
with  Europe  for  foreign  commercial  supremacy." 

Considering  the  political  power  of  the  commit- 
tee, special  meaning  must  underlie  their  assur- 
ance when  they  say: 

"  We  feel  assured  that  the  National  Government 
will  give  the  full  weight  of  its  influence  towards 
the  success  of  this  movement  and  that  Congress  will 
promptly  and  adequately  respond  to  any  well  sup- 
ported demand  for  legislation  which  may  be  deemed 
beneficial  to  the  interests  of  the  country  as  repre- 
sented in  the  Convention." 

As  further  evidence  of  official  approval,  thus 
giving  the  convention  the  aspect  of  a  union  of 
private  and  official  powers,  the  invitation  said: 

"  The  Committee  has  the  very  great  pleasure  to 
announce  that  the  Honorable  Elihu  Root,  Secretary 
of  State  of  the  United  States,  has  consented  to  ad- 
dress the  Convention,  and  will  give  it  the  benefit  of 
his  observations  and  experiences,  and  of  the  in- 
formation acquired  on  his  recent  tour  of  the  South 
American  countries,  the  object  of  which  was  to 
bring  about  closer  relations  between  those  countries 
and  ourselves," 


206      THE  PASSING  OF  THE  TARIFF 

The  convention  was  held  with  large  attendance 
and  was  as  successful  as  numbei's  and  enthusiasm 
could  make  it. 

In  Ills  speech  at  the  Harvard  Union,  January 
14,  1907,  Leshe  M.  Shaw,  secretary  of  the  treas- 
ury, said: 

"  We  will  pretty  soon  be  compelled  to  develop 
international  merchants.  England,  Germany  and 
France  are  great  manufacturing  countries,  and  they 
hunt  the  world  for  markets  for  25  per  cent,  of  their 
products.  And  they  take  their  own  ships  to  hunt 
them  with,  too.  We  manufacture  as  much  as  France 
and  Germany  and  England  combined,  consume  95 
per  cent,  of  it  ourselves,  and  only  hunt  markets  for 
5  per  cent.  If  you  boys  think  you  are  going  to 
live  to  be  as  old  as  I  am,  and  find  no  more  surplus 
products,  you  are  mistaken.  In  the  last  century 
there  were  great  conflicts  for  territory.  The  cen- 
tury in  which  you  are  will  witness  the  greatest  con- 
flicts in  the  world  for  markets.  God  grant  that 
they  may  be  bloodless,  but  they  will  be  just  as  in- 
tense as  any  that  have  gone  before.  And  just  as 
certain  as  the  world,  we  are  going  to  need  inter- 
national merchants. 

In  South  Africa  there  is  a  market  of  $650,000,- 
000.  We  furnish  12  per  cent,  of  it.  The  Orient 
imports  $1,000,000,000.  We  furnish  10  per  cent, 
of  that.  I  want  11  per  cent.  We  must  get  this 
international  trade.  South  America  has  scarcely 
heard  of  the  United  States  as  a  great  commercial 
country.     She  never  sees  our  flag.     Our  ships  never 


INCOMPATIBLE  POLICIES        207 

enter  her  harbors.  We  have  a  few  old  hulks  going 
eight  or  nine  knots  an  hour,  not  belonging  to  us, 
carrying  freights  to  this  country.  And  they  sail 
when  they  get  loaded.  If  we  had  a  ship  that  went 
from  Boston  to  ports  of  South  America,  and  you 
knew  just  when  it  was  going  to  sail  you  would  find 
the  agent  of  that  ship  knocking  at  the  doors  of 
your  factories  for  freight  to  take  down  there.  He 
would  tell  you  the  kind  of  shoes  they  wore  down 
there,  and  you  could  manufacture  them.  We  ig- 
nore that  trade  entirely  now." 

Further  illustration  is  found  in  an  organiza- 
tion to  develop  our  foreign  commerce,  which  is 
the  subject  of  a  column  letter  from  Washington, 
under  date  of  December  10,  1907,  in  the  Boston 
Transcript  under  the  heading:  "New  Plan  to 
Gain  Trade.  National  Chamber  of  Commerce 
Organized."  The  opening  paragraph  gives  the 
credit  of  the  organization  to  Isidor  Straus,  sec- 
retary of  the  Department  of  Commerce  and  La- 
bor, whose  name  with  others  follows  that  of  Cor- 
nelius N.  Bliss  as  signers  of  the  circular  above 
quoted  from.  It  is  said :  "  It  is  expected  that 
a  permanent  headquarters  for  the  so-called  ad- 
visory committee  will  be  established,  probably  in 
Washington,  and  that  this  body  will  enlarge  the 
membership  of  the  National  Council  of  Com- 
merce strictly  on  business  principles."  Further, 
Secretary  Straus  "  intends  to  dignify  the  Na- 
tional Council  of  Commerce  by  giving  very  re- 
spectful attention  to  its  suggestions."     Reports 


208     THE  PASSING  OF  THE  TARIFF 

*'  are  made  by  experts,  dealing  with  special  for- 
eign trade  opportunities  in  certain  lines,  notably 
foreign  goods."  The  secretary  is  represented  as 
"  keenly  alive  "  to  the  necessity  of  a  foreign  mar- 
ket for  cottons.  He  is  reported  to  favor  a  pos- 
tal subsidy  for  South  American  and  Pacific 
steamers,  and  it  would  seem  as  if  the  official  en- 
ergies of  the  department  were  to  be  exerted  with 
enthusiasm  for  the  development  of  our  foreign 
trade.  These  words  are  quoted  from  liim :  "  My 
purpose  is  to  crystallize  and  systematize  the  busi- 
ness ability  of  the  country  for  the  purposes  of 
development  and  negotiation." 

It  is  a  fair  credit  to  give  to  the  producers  of 
our  country  that  they  are  beginning,  on  a  large 
scale,  to  realize  that  they  cannot  impair  the  for- 
eign market  without  financial  injury  to  them- 
selves, that  if  they  want  to  sell  to  foreigners  they 
must  also  buy  of  them,  and  that  it  is  desirable 
to  cultivate  as  friendly  relations  as  possible  with 
possible  customers  across  the  water,  rather  than 
anger  them.  Shrewd  salesmen  have  realized  for 
many  years  in  our  own  country  the  proverb  that 
"  molasses  catches  more  flies  than  vinegar "  and 
have  practised  it,  to  their  profit  and  to  the  pro- 
motion of  personal  good  feeling  in  trade.  Grad- 
ually our  manufacturers  are  realizing  that  the 
same  preference  for  the  sweets  of  life,  rather  than 
the  sours,  is  a  trait  common  to  foreigners  with 
ourselves.  That  is  the  meaning  of  the  wide- 
spread prevalence  of  belief  in  reciprocity.     To 


INCOMPATIBLE  POLICIES         209 

that  feeling,  in  common  with  the  generally 
broader  view  of  foreign  trade  relations,  is  due 
the  growing  demand  from  all  parts  of  the  coun- 
try that  the  tariff  be  lowered.  High  tariff  men, 
with  all  their  prodigious  power  in  politics,  have 
barely  prevailed  to  postpone  the  tariff  reform  till 
after  the  presidential  election  of  1908.  By  gen- 
eral agreement  revision  must  then  come. 

Now  this  demand  is  based  upon  a  realization 
of  the  radically  changed  situation.  This  change 
is  permanent.  This  wider  outlook  has  come  to 
stay.  We  must  trade  abroad  more  freely  if  our 
manufacturers  are  to  find  their  most  profitable 
markets  and  are  to  do  their  largest  wholesale 
business.  If  we  are  to  sell  to  foreign  customers, 
we  must  buy  from  them.  We  must  consent  that 
they  make  a  profit,  as  well  as  ourselves,  in  order 
that  they  may  buy  from  us,  if  we  put  it  on  selfish 
grounds  alone.  This  broader  view  is  one  of  the 
consequences  of  the  development  of  modem  in- 
ventions of  telegraphic  communication,  of  the 
multiplication  of  opportunities  for  cable  corre- 
spondence, of  the  improvements  of  ocean  trans- 
portation, of  the  lowering  of  ocean  freights,  of 
the  shortening  of  ocean  voyages  and  of  the  hun- 
dred other  improvements  which  bring  the  ends 
of  the  world  together  at  a  reduced  expense. 

These  conditions  will  not  revert,  but  will  in- 
crease in  their  efficiency  for  profit.  They  have 
already  forced  the  high  tariff  men  against  their 
will  to  admit  the  reasonableness  of  tariff  reduc- 


210     THE  PASSING  OF  THE  TARIFF 

tion.  They  are  full  of  persistent  energy.  They 
touch  the  pocket-nerve.  This  movement  will 
never  retreat.  It  will  advance.  It  will  force 
further  concessions  from  the  obstruction  party, 
till  the  theory  itself  of  obstruction  of  trade  for 
the  profit  of  the  nations  between  which  the  ob- 
structions are  raised  will  take  its  place  with  the 
Ptolemaic  theory  of  astronomy,  the  worship  of 
the  rag  baby  and  other  once  popular  but  now 
despised  idols. 


CHAPTER  XVI 
SUBSTITUTES  FOR  TARIFF  REVENUE 

Very  likely  tlie  tariff  men  will  challenge  any 
opponent  to  devise  a  system  of  raising  money 
for  the  support  of  the  government  which  will 
be  as  little  obnoxious  to  the  people  as  the  gath- 
ering of  the  money  at  the  custom  houses.  Steady 
supply  and  a  taking  invisible  to  the  mass  of  the 
people  are  the  characteristics  of  the  present 
method.  But  the  challenge  can  be  met  in  more 
ways  than  one. 

In  the  first  place,  there  Is  the  method  which  has 
been  always  in  mind  by  the  school  of  tariff  for 
revenue  as  opposed  to  the  school  of  tariff  for 
protection.  England's  example  is,  in  the  main, 
the  one  in  mind  as  the  most  practical  alternative 
for  the  present  system.  Having  a  large  part  of 
the  receipts,  some  more  than  half,  raised  by  in- 
ternal revenue,  the  question  is  how  to  raise  the 
remainder  and  the  system  of  a  revenue  tariff  is 
always  in  mind  as  approved  by  practice. 

But  changes  can  be  made  from  that,  if  it  is  be- 
lieved best  to  relieve  trade  from  all  taxation  what- 
ever, and  in  considering  changes  it  is  always  to 
be  remembered  that  the  laws  of  finance  have  no 
regard  for  statute  law  or  for  the  constitution 
of  the  United  States.  It  is  admitted,  if  the  ad- 
mission is  wanted,  that  it  is  an  exceedingly  diffi- 
211 


212      THE  PASSING  OF  THE  TARIFF 

cult  task  to  amend  the  Constitution  of  the  United 
States.  If  the  best  system  of  collecting  money 
for  the  support  of  the  government  requires  a 
constitutional  amendment,  such  obstacles  would 
be  great  practically,  but  the  greatness  would  not 
be  the  slightest  argument  against  the  validity 
and  justice  of  the  best  system.  If  the  decision 
of  the  United  States  supreme  court  is  always  to 
stand  that  an  income  tax  is  unconstitutional,  then 
the  national  government  can  levy  no  such  tax 
without  an  amendment  to  the  constitution.  But 
the  need  of  the  amendment,  as  a  preliminary  step, 
would  have  no  bearing  upon  the  status  of  the  in- 
come tax  as  a  proposition  of  scientific  and  equit- 
able taxation. 

It  is  a  fair  proposition  that  the  taxation  sys- 
tem of  the  United  States  will  be  changed  some- 
time. People  are  learning  better  their  relations 
as  citizens  of  the  states  and  of  the  nation.  An- 
tagonisms where  none  are  inherent  or  necessary 
will  disappear.  A  man  is  not  a  Baptist  as  a  citi- 
zen of  the  United  States  and  a  Methodist  as  a 
citizen  of  New  York.  Tax  propositions  which 
are  untenable  now  may  yet  be  accepted.  When 
the  right  relation  between  the  states  and  the  na- 
tional government  is  a  matter  of  habit  and  when 
practice  shall  have  made  methods  satisfactory 
which  are  now  untried,  it  is  quite  possible  that 
there  will  be  but  one  tax  bill  for  the  support  of 
the  government  of  the  United  States,  of  the  state, 
of  the  county,  and  of  the  city  or  town,  as  it  comes 


REVENUE  SUBSTITUTES  213 

once  a  year  to  every  taxpayer.  Questions  of  sov- 
ereignty between  state  and  nation  may  be  waived 
or  shown  not  to  involve  controversy  and  the  sim- 
plest and  justcst  system  of  taxation  possible  may 
be  substituted  for  that  which  now  characterizes 
the  separate  bookkeeping  of  the  states  and  of  the 
nation. 

Since  the  taxpayers  are  the  same  who  pay  the 
taxes  which  support  the  national  and  the  state 
governments,  they  may  demand,  as  a  matter  of 
economy  and  efficiency,  having  in  the  meantime, 
by  the  necessary  adaptations  of  laws  and  consti- 
tutions, removed  all  legal  and  constitutional  ob- 
stacles, that  there  be  only  one  agency  of  collec- 
tion and  that  the  money  collected  shall  be  dis- 
tributed equitably  between  the  nation,  the  state, 
the  county  and  the  municipality. 

If  it  be  objected  that  cutting  off  the  regular 
inflow  from  the  custom  houses  would  leave  the 
government  with  an  empty  treasury  at  certain 
portions  of  the  year,  the  answer  is  twofold. 
There  would  be  a  material  quantity  from  internal 
revenue,  so  that  only  a  part  of  the  expense  would 
need  to  be  met  by  other  sources.  Upon  the  in- 
troduction of  the  new  system,  collection  might 
be  made  in  advance,  so  that  the  treasury  would 
always  be  in  funds,  or  there  might  be  followed 
such  a  practice  as  the  states  can  and  do  resort  to, 
namely,  borrow  money  in  anticipation  of  revenue. 
At  the  very  worst,  the  national  government  would 
be  in  no  more  embarrassing  situation  than  the 


2U      THE  PASSING  OF  THE  TARIFF 

state  governments  which  have  no  steady  tariff 
receipts  to  rely  upon,  and  a  situation  which  can 
be  successfully  financed  by  every  state  every  year 
surely  can  be  financed  with  equal  ease  by  the  na- 
tional government.  So  the  objection  is  not  one 
which  cannot  be  removed. 

It  is  quite  possible,  when  a  better  tax  system 
shall  have  been  established  for  the  nation,  with 
closer  relations  with  the  states,  that  adjustments 
will  be  found  relieving  certain  conditions.  In 
view  of  the  changing  field  of  business  of  corpor- 
ations, especially  of  transportation  corporations, 
it  is  possible  that  a  sense  of  justice  would  dictate 
that  a  material  corporation  tax,  instead  of  being 
retained  in  a  state  treasury,  should  be  taken,  in 
whole  or  in  part,  by  the  national  treasury.  Al- 
though states  may  be  loth  to  surrender  their  in- 
come taxes,  yet  the  fact  that  many  fortunes  are 
now  made  by  operations  covering  several  states 
and  under  the  protection  of  national  law,  as  well 
of  state  law,  with  the  expense  of  protection  which 
falls  upon  the  national  government,  may  per- 
suade the  people  of  the  justice  of  paying  a  part 
or  the  whole  of  the  income  taxes  into  the  national 
treasury. 

States  are  finding  that  inheritance  taxes  are 
prolific,  as  well  as  just.  Reasons  similar  to  those 
pertinent  in  case  of  the  income  tax  apply  why  a 
part  of  this  tax  should  go  into  the  national 
treasury. 

On  the  other  hand,  there  are  possible  just  de- 


REVENUE  SUBSTITUTES       215 

ductions  to  be  made  from  the  expenses  of  the 
national  government.  It  is  quite  possible  that 
a  fair-minded  weighing  of  the  benefits  from  the 
improvements  of  the  rivers  and  harbors  would 
result  in  the  decision  that  a  part  of  the  cost  should 
be  apportioned  to  the  localities  most  benefited, 
in  addition  to  their  present  portion  as  members 
in  general  of  the  Union.  It  is  also  quite  possi- 
ble that  a  fair-minded  weighing  of  the  benefits 
from  the  extensive  irrigation  and  reclamation 
policies  in  the  broad  West  would  result  in  the  de- 
cision that  a  part  of  that  cost,  also,  should  be 
apportioned  to  the  localities  most  benefited,  in 
addition  to  their  present  portion  as  members  in 
general  of  the  Union.  It  is  true  that  our  theory 
of  national  unity  is  given  as  justification  of  the 
present  policies.  But  there  is  no  sharp  dividing 
line  to  mark  the  theoretical  or  the  practical  sepa- 
ration of  state  and  national  jurisdiction.  States, 
with  state  money,  improve  their  rivers  and  har- 
bors. Massachusetts,  from  her  state  treasury, 
poured  out  millions  to  destroy  the  gypsy  and 
brown-tail  moths,  but  the  national  government 
finally  shared  the  work,  leaving  the  state  to 
carry  the  heavier  part  of  the  burden.  Surely 
the  nation  has  not  reached  perfection  in  the  col- 
lection of  taxes,  nor  yet  come  to  its  full  realiza- 
tion of  the  co-operation  possible  between  state 
and  national  governments.  It  is  always  to  be 
remembered  that  there  is  a  unity  of  states  and 
nation,  and  that  the  public  officials  are  servants 


216      THE  PASSING  OF  THE  TARIFF 

of  the  people.  Organs  of  the  body  pohtic  are 
the  means  of  self-service  by  the  people  and,  since 
the  people  of  states  and  nation  are  identical,  it 
is  their  right  and  privilege  to  make  their  respec- 
tive systems  of  service  fit  into  each  other  with  the 
utmost  practicable  economy  and  efficiency.  It  is  a 
reasonable  expectation  that  as  now  in  the  state 
there  is  a  single  yearly  tax  bill  having  printed  on 
it  the  precise  sum  which  is  taken  per  $1,000  for 
state  expenses,  for  the  county  and  for  the  city  or 
town,  so  there  will  be,  in  due  time,  a  single  yearly 
tax  bill,  with  a  printed  statement  upon  it  to  in- 
form the  taxpayer  precisely  how  much  of  his  pay- 
ment per  $1,000  is  taken  for  the  national  govern- 
ment, how  much  for  the  state,  how  much  for  the 
county  and  how  much  for  the  city  or  town.  One 
collection  will  suffice  for  all,  and  the  officials,  who 
serve  the  same  persons,  whether  in  their  capacity 
as  citizens  of  nation,  or  state,  or  county  or  munici- 
pality, can  make  the  distribution  according  to 
the  form  determined  by  law,  for  the  economy  and 
efficiency  of  the  service,  without  embarrassment 
to  either  of  the  four  forms  of  government  con- 
cerned. 


CHAPTER  XVII 
SEEN  AND  UNSEEN  TAXES 

Assuming  that  the  internal  revenues  raised  by 
the  present  system,  plus  an  income  tax,  an  in- 
heritance tax,  a  corporation  tax,  and  other  taxes 
which  may  be  regarded  by  the  people  as  justly 
due,  in  whole  or  in  part,  to  the  national  govern- 
ment, are  not  enough  to  meet  the  national  ex- 
penses, then  the  question  must  be  faced  how  the 
necessary  amount  should  be  raised.  Some  legis- 
lators, in  providing  means  of  revenues,  have  as 
their  pole-star  the  complete  removal  of  all  direct 
taxes.  By  as  much  as  the  visible  taxes  are  re- 
duced, by  so  much  do  they  seem  to  think  that 
the  burdens  of  the  people  are  made  lighter. 

Two  distinct  theories  seem  to  be  operative  in 
levying  taxes.  One  seems  to  regard  the  govern- 
ment as  if  it  were  a  power  higher  than  the  people, 
not  responsible  to  them,  yet  liable  to  be  over- 
thrown by  them,  and  depending  for  the  continu- 
ance of  its  life  upon  its  success  in  lulling  the  peo- 
ple to  confidence  in  its  supreme  wisdom  and  hon- 
esty. Hence,  when  it  comes  to  the  people  to  get 
the  money  for  its  expenses,  it  must  conceal,  as 
largely  as  possible,  the  amounts  it  takes,  and  it 
must  not  let  them  see  the  act  of  taking.  They  are 
to  be  drugged  by  the  highwayman,  as  it  were, 
before  they  are  robbed.  The  other  theory  is  that 
217 


218      THE  PASSING  OF  THE  TARIFF 

government  is  the  organic  fomi  of  action  by  the 
people  themselves,  for  themselves,  that  they  have 
a  right  to  know  every  detail  of  government 
finances  and  that  they  ought  to  be  conscious  of 
the  taking  of  every  dollar.  Between  these  types 
of  taxation  there  will  be  found  compromises  in 
operation,  but  these  types  represent  the  totally 
different  points  of  view  which  are  found  among 
legislators. 

It  is  the  latter  view  alone  which  can  be  justi- 
fied to  themselves  by  a  self-governing  people  with 
a  healthful  sense  of  self-respect.  They  are  not 
subjects  of  a  despotism.  They  are  not  the  tools, 
or  should  not  be,  of  a  partisan  administration 
whose  purpose  is  to  humbug  the  people  into 
believing  that  they  are  not  paying  much  for 
the  support  of  the  government  when  it  is  really 
costing  them  far  more  than  they  would  approve 
if  they  felt  the  burden  of  the  expenditure  di- 
rectly upon  them.  Let  it  be  assumed  that,  for 
reasons  of  justice  in  putting  taxes  where  there 
is  the  most  financial  ability  to  pay  them  (which 
is  the  justification  of  an  income  tax),  or  where 
they  tend  to  equalize  the  injustice  of  a  lifelong 
escape  of  just  taxes  by  tax-dodgers  (which  is  one 
justification  of  an  inheritance  tax),  and  for  rea- 
sons of  national  activity  (which  is  a  justifica- 
tion of  a  national  corporation  tax),  these  taxes 
are  added  to  the  system  of  internal  revenue,  then 
it  is  both  sound  finance  and  expedient  taxation 
policy  to  raise  the  remainder  of  the  revenue  by 


SEEN  AND  UNSEEN  TAXES      219 

levying  direct  taxes.  Let  the  taxpayers  feel 
the  weight  of  the  burden  they  have  to  bear.  Then 
they  will  take  more  interest  in  the  administration 
and  will  scan  its  policy  more  closely.  The  ad- 
ministration will  realize  its  responsibility  con- 
stantly and  be  more  careful  in  its  outlays.  Di- 
rect taxes  would  tend  to  more  economy  and  better 
efficiency  in  every  clerk's  office  at  Washington  and 
in  every  government  office  all  through  the  coun- 
try. If  there  were  a  system  of  joint  collection 
of  revenue  by  the  national  and  state  governments, 
so  that  one  tax  bill  came  to  every  taxpayer,  hav- 
ing printed  on  it  the  proportion  of  the  annual 
dues  which  went  respectively  to  the  nation,  to  the 
state,  to  the  county  and  to  the  municipality,  then 
every  payer  would  realize  his  share  of  the  bur- 
den of  the  support  of  the  national  government. 
He  would  demand  to  know  where  his  money  went 
and  whether  a  smaller  amount  would  not  be 
equally  effective.  Wasteful  appropriations  and 
logrolling  schemes  would  stand  less  chance  of 
passing  through  Congress  and  there  would  be 
such  challenges  as  we  now  see  in  state  and  mu- 
nicipal finance,  but  which  are  much  less  frequent 
and  imperative  upon  the  floor  of  either  branch 
of  Congress. 

Such  a  system  would  bring  home  to  the  tax- 
payers the  financial  operations  of  the  govern- 
ment far  more  than  the  extra  price  which  is  paid 
for  clothing,  sugar,  building  material  and  the 
thousand  other  necessities  which  are  covered  by 


220      THE  PASSING  OF  THE  TARIFF 

the  Dinglej  tariff.  Such  a  direct  payment 
would  be  more  manly  and  straightforward,  more 
worthy  the  methods  of  a  self-governing  and  in- 
telligent people  than  smothering  the  taxes  under 
prices  artificially  raised,  so  that  the  payer  has  no 
perception  of  the  proportion  which  goes  to  the 
government  when  he  pays  it.  If  indirect  taxes 
meant  no  taxes,  then  the  policy  of  indirect  taxa- 
tion would  be  justified.  If  the  payment  were 
necessarily  a  painful  operation,  like  having  one's 
leg  cut  off,  then  the  administration  of  an  anes- 
thetic would  be  justifiable.  But  the  intelligent 
citizen,  honest  and  patriotic,  stands  ready  to  pay 
cheerfully  his  entire  share  of  taxes.  He  does  not 
wish  to  take  ether,  nor  be  blindfolded.  He  is 
perfectly  ready  to  face  the  real  situation  as  far 
as  he  is  concerned  on  his  side  of  the  transaction, 
while,  for  the  administration's  side,  he  desires 
that  the  taking  shall  be  open  and  that  the  spend- 
ing shall  be  economical.  Money  which  comes 
easily  goes  easily  and  unseen  taxes  are  more  likely 
to  be  voted  loosely  by  an  irresponsible  Congress 
than  those  whose  burden  is  felt  when  the  money 
is  taken,  for  money  which  comes  hard  goes  hard 
also. 

Therefore,  if  the  obstructionists  object  to  the 
removal  of  the  obstructions  of  trade  because  It 
would  also  require  changes  in  the  raising  of  rev- 
enue and  because  the  people  prefer  to  have  their 
taxes  unseen,  the  answer  is  that  seen  taxes  are  bet- 


SEEN  AND  UNSEEN  TAXES       221 

ter  for  the  people  than  unseen  and  that  intelli- 
gent and  patriotic  taxpayers  will  prefer  to  know 
when  they  pay  and  how  much  the  government 
is  taking. 


CHAPTER   XVIII 

THE  WORLD'S  RIGHT  TO  LOW  PRICED 
GOODS 

In  the  discussion  of  the  trade  relations  of  the 
different  parts  of  the  world  —  a  sub j  ect  which 
includes  both  politics  and  economics  —  such  prog- 
ress has  been  made  in  the  perception  of  truth, 
or  such  new  recognition  of  old  truth,  that  a  new 
condition  exists.  Former  arguments  fail  to  cover 
the  ground  because  they  are,  at  best,  only  par- 
tially based  upon  conditions  embracing  the  en- 
tire world.  World  unity  is  a  fundamental  fact 
in  this  tariff  discussion.  Freedom  of  will,  indi- 
vidual, independent  existence,  separate  from 
other  wills  for  every  human  person,  with  each 
equal  to  every  other,  is  another  fundamental 
truth.  Some  people  hold  tlie  doctrine  that  the 
truths  of  world  unity  and  human  brotherhood 
lead  to  the  conclusion  that  the  world  owes  every 
person  a  living.  It  may  be  conceded,  with  the 
added  condition,  "  if  he  pays  for  it."  But,  with- 
out condition,  it  is  just  to  affinn,  and  our  politi- 
cal principles  do  affirm  that  equal  opportunity 
with  every  other  person  should  be  given  to  each 
person  to  make  the  best  use  of  his  powers.  Given 
equal  opportunity  and  freedom  to  improve  it, 
then  the  result  depends  upon  the  person.  The 
state,  as  the  organic  body  of  mankind,  has  its 
222 


RIGHT  TO  LOW  PRICED  GOODS      223 

duty  in  maintaining  these  conditions.  It  is  not 
necessary  here  to  consider  the  inequalities  of  nat- 
ural endoAvment  and  opportunity. 

A  new  element  in  modem  tariff  discussion,  far 
out  of  proportion  to  the  prominence  formerly 
given  to  it,  is  the  unity  and  supremacy  of  the 
political  body.  Modem  use  of  the  theory  of 
eminent  domain,  the  many  public  enterprises 
which  are  already  managed  by  servants  of  the 
people  for  the  people  as  a  whole,  the  growing 
discussion  of  the  rightful  and  profitable  limits 
of  service  to  the  people  by  emplo^^ees  of  the  peo- 
ple illustrate  how  the  thought  of  the  generation 
differs  from  that  of  the  generation  previous. 

Eminent  domain  rests  upon  the  right  of  the 
people,  as  a  whole,  supreme  over  any  individual 
right.  But  the  unity  of  mankind  is  a  truth  as 
potent  as  the  truth  of  the  unity  of  the  people 
of  a  state  of  the  United  States,  or  the  unity  of 
the  people  of  the  United  States  as  a  whole.  If 
the  people  of  a  state  as  a  unit,  have  eminent  do- 
main over  the  territory  of  their  state,  much  more 
do  the  people  of  all  the  earth,  as  a  unit,  have  emi- 
nent domain  over  all  the  territory  of  the  earth. 
Whether  or  not  that  doctrine  has  yet  made  its 
way  upward  into  the  light  of  recognized  status 
in  international  law  is  not  to  the  point.  Af- 
firmation is  here  confidently  made  that  it  is  a 
truth,  and  it  may  be  left  to  find  its  way  into  in- 
ternational law,  or  into  the  coming  higher  world 
law,   at  the   pleasure  of  the  human   instruments 


224      THE  PASSING  OF  THE  TARIFF 

whose  profit  lies  in  obe3ing  the  laws  above  them. 
It  asks  no  favors  from  any  politician  or  states- 
man. It  is  in  no  hurry.  It  has  waited  for  ages. 
A  few  years  longer  signify  much  less  to  it  than 
to  the  men  it  is  waiting  to  benefit. 

It  is  the  fact  of  existence  as  a  human  person 
which  gives  that  person  the  right  to  equal  oppor- 
tunity with  every  other  person  on  the  earth. 
Earth's  wealth  is  for  the  people  of  the  earth  in 
their  collective  capacity.  No  portion  of  the  in- 
habitants of  the  earth  has  any  right,  under  the 
verj^  laws  of  their  being,  to  shut  off  a  portion 
of  the  earth  and  say  that  other  people  shall  not 
enter.  It  is  true  that  this  is  not  accepted  doc- 
trine now.  But  the  truth  of  the  unity  of  man- 
kind carries  with  it  some  weighty  corollaries,  of 
which  this  is  one,  which  exist  regardless  of  their 
acceptance  or  rejection  by  the  people  of  the 
earth.  This  truth  does  not  imply,  by  any 
means,  that  there  is  no  right  of  property,  as  a 
subordinate  proposition,  any  more  than  the  ac- 
cepted doctrine  of  eminent  domain  of  the  state 
destroys  the  doctrine  of  the  rightfulness  of  pri- 
vate ownership  of  property.  But  it  does  affirm 
the  supremacy  of  the  general  welfare  over  a  mo- 
nopolistic holding  by  a  portion  of  the  whole 
which  prevents  or  diminishes  the  general  welfare. 

If  we  interpret  in  their  fullness  the  truths  in 
our  Declaration  of  Independence  and  in  our  vari- 
ous Bills  of  Rights,  we  find  in  them  a  moral  ele- 
ment.    This  clement  inheres  in  the  very  constitu- 


RIGHT  TO  LOW  PRICED  GOODS      225 

tion  of  mankind  as  a  unit.  The  tariff  therefore 
becomes  a  moral  question.  It  is  by  no  means  a 
pure  business  question,  but  it  concerns  the  rights 
of  men  to  their  just  share  in  the  earth's  products  ; 
that  is,  it  concerns  their  opportunity  to  work  for 
a  share  in  those  products.  The  despotism  of  a 
nation  in  shutting  off  from  their  rights  a  portion 
of  the  people  of  the  earth  is  an  infringement 
upon  the  rights  of  those  persons.  It  is  an  at- 
tack upon  them  in  their  highest  quality,  just  as 
the  attitude  of  Great  Britain  toward  the  Ameri- 
can colonies  before  they  obtained  their  independ- 
ence by  force  was  an  attack  upon  their  rights. 
Resistance  by  force  is  as  justifiable  in  the  modem 
case  as  in  the  former  one,  though  the  equal  re- 
missness of  all  the  nations  in  holding  the  opposite 
doctrine  has  prevented  the  acceptance  of  the  true 
doctrine.  But  if  the  American  colonies  had  the 
moral  right  to  rebel  against  the  Mother  Country 
because  it  violated  their  moral  rights,  then  the 
superior  might  of  the  world,  basing  its  claim  upon 
the  moral  rights  of  the  people  of  the  world,  has 
the  right  to  break  down  by  force  any  barrier  set 
up  by  any  nation  which  prevents  the  people  of 
the  earth  from  having  their  equality  of  oppor- 
tunity in  sharing  the  good  things  of  the  earth. 
Whether  force  is  the  best  method  is  an  entirely 
different  question.  It  involves  many  other  phases 
of  morals.  But  there  can  be  no  doubt  that  there 
is  a  moral  wrong  on  the  part  of  the  portion  of 
the  people  of  the  earth  who  deny  their  share  in 


226      THE  PASSING  OF  THE  TARIFF 

being  a  part  of  the  human  race,  who  stand  out- 
side of  it  and  assert  that  they  are  free  from  the 
obligations  which  the  very  fact  of  their  existence 
implies. 

If  this  truth  is  held  up  for  inspection  a  little 
longer,  it  will  be  seen  that  it  will  bear  the  full 
flood  of  sunlight.  The  missionary  enterprises 
of  the  higher  nations  toward  those  less  advanced 
are  not  regarded  by  those  most  developed  in  these 
matters  as  pure  benevolences,  but  it  is  held  that 
the  higher  have  a  duty  to  the  lower,  that  the  lower 
have  rightful  claims  upon  the  higher  for  help 
from  their  hand,  that  the  nations  which  have  the 
Bible  owe  to  those  which  do  not  have  it  the  duty 
of  carrying  it  to  them,  even  though  the  lower, 
before  the  missions  begin,  have  no  knowledge  of 
their  lack  and  would  never  press  the  claim  of 
duty.  It  is  the  unity  of  all  in  the  human  race 
which  carries  with  it  the  obligation. 

But  the  obligation  in  the  unity  of  humanity 
does  not  cease  its  claims  with  the  delivery  of  the 
gospel  message  alone.  It  pertains  to  other 
things  in  which  the  human  race  has  a  common 
interest  and  right  as  fully,  though  not  with  the 
eternal  consequences,  as  it  does  to  missionary  ac- 
tivities. Equal  opportunity,  being  a  right  in- 
herent in  the  existence  of  equal  free  wills  of  the 
human  race,  and  the  human  race  being  one,  in 
all  parts  of  the  earth,  then  the  equality  of  oppor- 
tunity of  effort,  as  a  moral  right,  extends  to  all 
parts  of  the  earth.     That  is,  the  government  of 


RIGHT  TO  LOW  PRICED  GOODS    227 

the  earth  —  the  governments  by  nations,  which 
now  prevails,  and  the  government  by  the  organ- 
ized world  body  politic,  which  is  already  in 
sight  —  owes  it  to  every  individual  on  the  face 
of  the  earth,  not  under  restraint  for  crime  and 
of  accountable  years  and  capacity,  that  he  be  free 
to  seek  his  equality  of  opportunity  upon  whatever 
part  of  the  earth  he  pleases.  Individual  energy 
in  finding  the  best  place  is  a  better  guide  to  the 
most  profitable  employment  of  personal  faculties 
and  opportunities  than  legislation  by  strangers 
to  individuals  for  the  regulation  of  the  mass  of 
people. 

Again,  since  the  human  race  is  one  and  the 
wealth  of  the  earth  is  the  property  of  the  masters 
of  the  earth,  in  their  collective  capacity,  to  be 
used  as  a  trust  in  the  service  of  Him  who  made 
both  the  persons  and  the  wealth,  then  there  is  a 
moral  right  inhering  in  the  aggregate  of  man- 
kind, against  which  there  can  be  no  moral  right 
inhering  in  any  local  part,  that  the  wealth  of 
the  earth  be  used  for  the  service  of  all  parts  of 
the  human  race.  All  parts,  as  a  unity,  being  the 
proprietor,  all  parts,  as  a  unity,  must  have  equal 
right  to  the  benefit  from  the  wealth.  Therefore 
the  government  of  the  world  should  make  it  cer- 
tain that  there  is  no  monopoly  of  the  surplus 
wealth  of  any  part  by  the  people  of  that  part 
(or  by  a  people  who  can  seize  that  part  by 
force),  whereby  mankind,  as  a  whole,  is  excluded 
from  equal  enjoyment  of  the  wealth  of  that  part. 


228     THE  PASSING  OF  THE  TARIFF 

That  is,  in  other  words,  the  products  of  zones, 
countries  and  districts  which  are  favored  in  an 
especial  manner  by  nature  for  the  production  and 
distribution  of  a  particular  crop,  fruit  or  other 
form  of  wealth,  have  no  moral  right  to  shut  off  the 
entire  world  from  obtaining  for  each  part  its 
due  proportion,  by  giving  an  equivalent  in  trade, 
after  overcoming  the  natural  obstacles  in  the 
way  of  production  and  distribution. 

Great  increase  in  the  wealth  of  the  world  would 
follow  the  recognition  b}'  the  people  of  the  earth 
of  this  truth  which  ought  to  be  operative  for  the 
benefit  of  them  all.  Under  the  influence  of  this 
truth,  enterprise  would  seek,  in  every  case,  the 
Investment  of  money  and  of  labor  where  there 
would  follow  the  largest  returns  for  the  least 
outlay.  This  is  good  business,  and  it  is  plain 
common  sense,  upon  which  every  reasonable  per- 
son acts  in  all  his  activities  involving  the  pro- 
duction of  goods  for  human  needs.  This  means 
that  the  prices  of  the  necessities  of  life  particu- 
larly, and  of  the  luxuries  also,  would  be  at  the 
lowest  possible  point.  The  human  race  would 
get  the  most  possible  for  the  least  possible  effort 
and  thus,  with  the  establishment  of  world  justice, 
world  wealth  would  increase  faster  than  by  any 
other  possible  means.  Distribution,  with  justice 
between  producer  and  consumer,  would  be  as  per- 
fect as  human  ability  could  devise.  Therefore 
the  lot  of  the  poor  and  of  the  persons  of  less 
ability    would    improve     faster    than    under    any 


RIGHT  TO  LOW  PRICED  GOODS    ^29 

other    system    of    production    and    distribution. 

Low  prices,  as  a  measure  of  the  effort  for  pro- 
duction of  goods,  mean,  under  normal  conditions, 
that  there  is  large  return  for  the  output  of  cap- 
ital and  labor.  Otherwise,  in  the  inevitable  con- 
ditions of  the  case,  prices  would  be  high.  Per- 
manent low  prices,  therefore,  mean  a  high  profit 
in  production.  It  is  the  most  desirable  condition 
possible  for  human  workers  and  investors.  It 
means  abundant  wealth,  compared  with  other  sys- 
tems. It  means  comparative  ease  in  getting  a 
living.  It  means  more  time  for  leisure,  for  the 
promotion  of  the  arts  and  sciences,  more  educa- 
tion for  children  who  otherwise  would  be  com- 
pelled to  work,  more  money  for  travel  and  for 
better  homes.  It  means  permanently  better 
health  for  the  body,  since  the  irksomeness  and 
wear  of  labor  would  be  reduced  the  most  possi- 
ble. It  means  more  lightsomeness  and  good 
cheer  of  mind,  since  there  would  be  less  anxiety 
and  planning  in  desperation  to  keep  the  wolf 
from  the  door.  It  means  the  development  of  a 
higher  public  spirit,  the  promotion  of  public 
adornment  and  a  more  rapid  advance  of  the  en- 
tire earth  in  all  that  makes  for  the  welfare  of 
body,  mind  and  soul. 

These  are  consequences  which  go  with  recog- 
nition of  the  unity  of  mankind  as  a  single  politi- 
cal body.  No  one  who  has  seen  the  rapid  ad- 
vance of  the  race  toward  this  result  within  the 
last  half  century  can  doubt  that  the  goal  wiU  be 


230      THE  PASSING  OF  THE  TARIFF 

reached  far  sooner  than  its  critics  admit.  The 
v;orld's  right  to  low-priced  goods  is  one  of  the 
important  results  which  will  surely  be  recognized 
in  the  good  days  hereafter  when  tariffs  shall  cease 
to  divide  the  nations  and  to  promote  suspicions 
and  quarrels  between  them. 


CHAPTER  XIX 

THE  WORLD'S  RIGHT  TO  GOOD  WAGES 
AND  PROFITS 

If  the  proposition  that  the  world  has  a  right 
to  goods  with  low  labor  cost  be  turned  with  the 
other  side  to  the  front,  it  will  appear  in  this 
form:  that  the  world  has  a  right  to  good  wages 
and  profits.  This  truth  is  not  sufficiently  famil- 
iar to  prevent  repeating  it  in  connection  with 
the  proposition  that  mankind  is  a  unit  and  that 
world  sovereignty  is  universal.  It  is  important 
to  a  clear  understanding  of  the  truth  that  both 
sides  of  the  proposition  should  be  clearly  set 
forth,  for  many  people  have  the  idea  that  low 
priced  goods  are  an  indication  of  hard  times, 
while  the  fact  of  good  profits  is  regarded  by. 
those  who  see  them,  but  do  not  enjoy  them,  as 
a  demonstration  of  the  preying  of  an  oppressive 
monopoly  upon  the  welfare  of  the  people. 

But  a  little  thinking  will  show  that  low  priced 
goods,  in  the  normal  condition  of  industry,  are 
sold  at  low  figures  because  it  is  easy  to  get  them. 
It  is  the  fact  of  low  priced  goods  which  makes  it 
possible  to  get  good  wages  and  profits,  and  only 
upon  such  conditions,  in  a  normal  condition  of 
trade,  can  such  favorable  results  be  obtained. 

When  a  fishing  schooner  returns  with  a  big 
catch  of  fish,  then  the  price  of  fish  is  low.  But 
231 


232     THE  PASSING  OF  THE  TARIFF 

the  reward  of  the  voyage  was  great.  What  the 
schooner  went  to  get  was  as  much  of  food  sup- 
ply as  possible.  The  food  is  the  reward,  and 
the  reward  was  large.  It  is  the  fact  of  the  large- 
ness which  made  the  price  low.  The  entire  com- 
munity is  benefited.  Of  course,  when  there  is 
overproduction,  the  owners  and  the  fishermen  lose 
while  the  public  gain.  But  in  usual  industrial 
ventures,  where  there  is  no  overproduction,  but 
the  market  can  take  the  supply  without  a  col- 
lapse of  price,  lower  prices  go  with  abundance 
of  goods.  The  goods  are  the  real  wages. 
Large  returns  for  the  investment  follow  the  pro- 
duction of  goods  which  are  low  priced. 

When  the  discovery  of  gold  brought  enormous 
quantities  into  the  market,  the  world  got  the 
benefit,  though  the  price  of  gold  went  down. 
But,  since  gold  was  the  standard  of  currency, 
it  seemed  as  if  all  other  prices  went  up.  Really 
gold  declined.  People  could  get  it  more  easily. 
All  its  benefits  were  secured  at  less  cost.  The 
world  was  greatly  richer  by  the  production  of 
gold  so  cheaply  that  its  price  fell. 

When  there  is  a  great  wheat  harvest,  when  the 
price  falls,  then  the  public  gets  large  benefit. 
Then  the  poor  people  who  would  otherwise  be 
compelled  to  live  with  insufficient  nourishment 
can  eat  till  they  are  not  hungry.  Then  there  is 
that  general  improvement  of  health  among  the 
lower  classes  which  goes  with  sufficient  nutrition. 
The  power  to  produce  goods  is  increased.     The 


GOOD  WAGES  AND  PROFITS      233 

resistance  to  the  attacks  of  disease  is  strength- 
ened. Many,  doubtless,  are  the  hves  which  are 
saved  and  many  are  the  homes  which  are  spared 
the  mourning  for  the  absence  which  makes  the 
chair  empty  and  the  plate  untouched,  solely  be- 
cause there  is  a  cheaper  supply  of  food.  The 
wheat  is  the  wage  of  the  worker  and  in  its  low 
price  comes  the  largeness  of  the  reward.  It  is 
true  that  great  disturbances  may  occur  because 
of  overproduction,  but  that  introduces  new  con- 
siderations which  do  not  disprove  the  main  prop- 
osition. 

On  the  unity  of  mankind  and  the  right  of  all 
mankind  to  the  products  of  all  the  earth,  under 
that  attribute  of  world  sovereignty  which  may 
well  be  called  eminent  domain,  depends  the  prop- 
osition of  the  right  to  that  unrestricted  openness 
of  all  parts  of  the  world  to  all  other  parts  which 
will  enable  each  part  to  supply  its  needs  with  the 
least  expense  possible  under  all  earthly  condi- 
tions taken  together.  If  any  person,  therefore, 
is  denied  his  right  to  a  share  in  the  benefits  of 
all  parts  of  the  earth,  then  there  is  injustice  and 
oppression  at  that  particular  point.  If  this  de- 
nial is  caused  by  the  action  of  his  government, 
then  his  government  is  committing  a  wrong 
against  him  which  it  is  his  right  and  his  duty  to 
resist.  Resistance  may  take  the  form  of  agita- 
tion, remonstrance,  effort  to  educate  the  govern- 
ment to  change  its  policy,  or  to  securing  unity 
of  action  by  the  people  to  resist  the  government 


234.      THE  PASSING  OF.  THE  TARIFF 

as  effectively  as  possible.  It  is  not  said  here 
that  the  right  goes  to  the  point  of  revolution  by 
bloodshed,  for  that  introduces  the  question  of 
other  rights  —  the  balance  of  rights  to  property 
against  the  right  to  life  on  the  part  of  people 
who  would  be  destroyed  if  there  were  armed  colli- 
sion. But  there  is  no  doubt  of  the  existence  of 
injustice  and  of  the  right  to  agitate  against  it 
in  a  case  where  a  person  is  deprived  of  a  right 
which  inheres  in  his  existence  as  a  human  being. 

It  is  singular  what  inconsistency  those  can  be 
convicted  of  who  deny  the  right  to  low  priced 
goods,  to  good  wages  and  to  substantial  profits. 
They  put  obstructions  in  the  way  of  trade  in  or- 
der to  make  themselves  richer.  Now,  it  would 
seem  to  be  common  sense,  from  that  point  of  view, 
admitting  the  premises  that  the  country  can  pro- 
duce some  articles  with  more  profit  than  it  can 
produce  others  —  for  instance,  that  it  is  better 
adapted  to  produce  com  than  tea  —  to  retain 
in  the  country  that  wliich  it  can  produce  most 
profitably  and  therefore  increase  its  wealth  most 
rapidly.  If  the  most  wealth  is  to  be  made  by 
production  of  this  particular  kind,  then  produce 
it  in  the  utmost  profusion  and  keep  the  product 
all  at  home  and  thus  roll  in  wealth.  If  we  can 
produce  beef  cheaper  than  England,  then  forbid 
the  exportation  of  any  beef,  under  severe  penal- 
ties. At  least,  put  an  export  duty  on  it.  Make 
beef  so  cheap  that  all  of  us  can  have  sirloins  and 
tenderloins,   and   so   that   the   poor  shall   not   be 


GOOD  WAGES  AND  PROFITS      235 

compelled,  in  their  poverty,  to  take  up  with  shin- 
bones,  neck  pieces  and  livers.  Why  should  not 
the  poor  know  the  taste  of  a  good  juicy  piece 
of  steak  as  well  as  the  rich?  Is  not  he  an  un- 
patriotic and  cruel  man  who  would  send  the  best 
parts  of  the  beef  creature  to  rich  foreigners, 
after  our  rich  people  have  had  their  supply,  leav- 
ing nothing  but  the  least  desirable  parts  for  the 
wretched  ones  of  our  own  land?  Is  that  love  of 
Americans  for  Americans?  Why  not  forbid  the 
export  of  wheat,  keep  the  crop  at  home,  put  down 
the  price  and  feed  up  our  starving  widows  and 
orphans  and  give  them  the  first  chance?  If  we 
can  make  wealth  fastest  by  producing  what  is 
most  cheaply  produced,  why  will  not  the  nation 
gain  most  rapidly  in  wealth  by  prohibiting  the 
export  of  the  most  easily  produced  wealth? 

But  the  very  fact  that  those  who  believe  that 
wealth  is  to  be  increased  by  the  obstruction  of 
trade  never  propose  to  prohibit  exports  or  to  levy 
an  export  duty  shows  that,  when  it  comes  to  the 
real  proposition  itself,  in  a  plain  and  undisguised 
form,  they  know  that  obstruction  is  not  the  best 
way  to  promote  wealth.  Instinctively  the  ob- 
structionists, like  all  other  people,  realize  that 
no  burden  should  be  put  upon  our  export  trade. 
They  realize  that  the  quickest  way  to  increase 
wealth  is  to  trade  with  what  we  can  produce  most 
advantageously  and,  making  legitimate  use  of 
our  natural  advantage,  get  in  return  for  our 
needs  which  we  cannot  supply  as   cheaply,  sup- 


236     THE  PASSING  OF  THE  TARIFF 

plies  from  those  parts  of  the  world  which  can 
produce  them  more  cheaply  than  we  can.  We  can 
sell  our  most  profitable  produce  more  cheaply 
than  other  people  can  produce  it.  Others  can 
supply  us  more  cheaply  with  other  things  than 
we  can  supply  ourselves.  We  trade.  Each  side 
makes  money  by  the  transaction,  as  both  sides 
always  make  it  in  any  legitimate  trade.  The 
world  is  richer,  because  it  has  supplied  its  wants 
with  the  least  possible  outlay.  Each  part  has 
enjoyed  its  right  to  the  products  of  all  other 
parts  without  restriction. 

Suppose  that  the  bottom  truth  in  this  matter 
be  denied.  Suppose  that  the  unity  of  the  hu- 
man race  be  admitted  to  be  a  myth.  Suppose 
that  the  absolute  sovereignty  of  every  nation  by 
itself,  for  all  time,  be  conceded.  But  if  the  force 
which  makes  mankind  one  be  denied  existence  in 
the  case  of  the  entire  human  race,  then  it  must  be 
equally  denied  in  the  case  of  the  nation.  If  the 
bonds  of  humanity  have  no  avail,  surely  there  is 
not  as  much  binding  force  in  complexion,  lan- 
guage, religion,  place  of  residence  or  association 
in  political  matters.  Each  one  of  these  central- 
izing forces  is  less  compelling  than  the  unity  of 
essential  nature  which  underlies  all  mankind. 

But  if  the  nation  has  no  unifying  force  ade- 
quate to  subordinate  the  Interests  of  each  part 
to  the  good  of  the  whole,  then  the  nation,  as  a 
political  unity,  falls  asunder  into  atoms.  Its 
right   of   eminent    domain    is    gone.      It    has    no 


GOOD  WAGES  AND  PROFITS      237 

power  to  tax,  no  power  to  compel  military  serv- 
ice, no  right  or  power  of  self-defense,  no  possi- 
ble way  of  securing  its  own  existence.  It  would 
fall  to  pieces  within  twenty-four  hours  on  such 
a  hypothesis.  The  individual  would  be  supreme, 
owing  no  duties  to  others,  having  no  superior  in 
property  rights,  able  to  hold  his  parcel  of  land 
on  the  line  of  a  proposed  railroad  so  that  con- 
struction of  through  lines  would  be  impossible, 
competent  to  block  and  destroy  concert  of  ac- 
tion at  every  point.  Such  a  condition  would  be 
sure  to  throw  the  entire  world  into  hopeless  con- 
fusion and  destructive  collision  and  make  a  mock- 
ery of  every  effort  at  organic  existence.  Such 
is  the  inevitable  and  legitimate  consequence  of 
denying  the  unity  of  the  human  race. 

It  is  true  that  the  nations  are  not  yet  up  to 
the  point  of  recognizing  the  truth  that  there  is 
a  higher  sovereignty  than  national  sovereignty. 
But  they  are  rapidly  advancing  toward  such  rec- 
ognition. Successive  international  conferences 
at  The  Hague  are  developing  the  self -conscious- 
ness of  the  world  and  are  hastening  the  time  when 
the  political  unity  of  the  world  will  be  a  familiar 
idea  to  all  nations  and  when  the  practical  exer- 
cise of  world  sovereignty  will  remove  all  doubts 
as  to  either  its  existence,  or  the  practicability  of 
its  exercise,  or  its  necessity  to  the  highest  wel- 
fare of  humanity  as  a  whole.  The  fact  that  the 
world  has  not  advanced  as  high  as  it  is  destined 
to  advance  is  no  proof  that  it  will  not  accomplish 
its  destiny. 


238      THE  PASSING  OF  THE  TARIFF 

This  rising  self -consciousness  is  new,  but  it  is 
resistless  and  as  it  increases  its  force  will  spread 
in  geometrical  ratio.  The  world  has  entered  a 
new  era.  Inevitably,  therefore,  there  is  a  new 
era  of  tariff  discussion.  The  proposition  of  the 
political  unity  of  the  world  will  shatter  the  ex- 
clusiveness  which  is  essential  to  the  obstruction 
doctrine,  and,  again,  in  a  new  light,  we  see  the 
truth  that  the  mistaken  doctrine  is  fast  approach- 
ing to  the  limit  of  its  earthly  existence.  It  can- 
not live  in  the  sunlight  of  the  truth  that  all  men 
are  bom  free  and  equal  and  *'  are  endowed  by 
their  Creator  with  certain  unalienable  rights,  that 
among  these  are  hfe,  liberty  and  the  pursuit  of 
happiness."  The  long-lived  tuberculosis  germ, 
which  has  thrived  in  the  shades  of  ignorance  and 
in  the  selfish  exploitation  of  the  many  by  the 
few,  will  die  in  the  sunlight  of  the  unity  and 
equality  of  all  men.  That  day  is  not  distajit, 
and  every  vessel  which  carries  a  cargo  across  the 
ocean  and  every  submarine  cable  laid  under  the 
Atlantic  or  the  Pacific  brings  the  day  nearer  when 
the  death  of  the  present  mistaken  system  will 
be  definitely  declared.  Equality  of  opportunity 
for  each  unit  of  the  human  race  as  a  unit}'  carries 
with  it  the  right  to  enjoy  that  opportunity  in 
any  part  of  the  earth  taken  as  a  unit,  and  the 
right  to  share  without  discrimination  in  the  bene- 
fits of  unobstructed  trade  between  all  parts  of  the 
earth  taken  as  a  unit. 


CHAPTER  XX 
WORLD  UNITY  AND  WORLD  TRADE 

By  the  action  of  the  second  Hague  Confer- 
ence in  recommending  that  the  Conference  be 
made  a  permanent  institution  a  formal  step  was 
taken  toward  the  organization  of  the  world  into 
a  single  political  body.  Plenty  of  facts  have 
become  historical,  pointing  unequivocally  to  that 
consummation.  New  and  powerful  forms  of  old 
forces  have  come  into  action  within  a  few  years, 
comparatively,  which  are  tending  to  the  formal 
political  union  of  all  the  nations.  World  sov- 
ereignty is  rising  to  view  as  a  power  supreme 
over  national  sovereignty,  supplementary  to  it, 
and  not  in  contradiction  to  it.  This  supremacy 
will  be  fraternal  and  harmonizing,  welcomed  by 
all,  as  soon  as  its  true  nature  and  functions  are 
perceived,  especially  by  those  who  conduct  the 
political  conduct  of  the  nations.  Strong  influ- 
ences are  enlisted  in  the  movement  and  it  promises 
to  become  a  fertile  subject  of  popular  thought 
in  the  near  future. 

World  unity  promises  to  cause  radical  changes 
in  the  trade  relations  between  the  fragments  of 
the  human  race  which  are  now  arrayed  under  the 
hostile  and  superficial  classification  of  national- 
ity. Here  it  is  proposed  to  consider  some  of  the 
239 


240       THE  PASSING  OF  THE  TARIFF 

forces  in  active  operation,  soon  to  be  exercised 
in  greater  intensity,  to  affect  the  currents  of  trade, 
and  to  forecast  what  seem  to  be  reasonable  and 
inevitable  consequences   from  their  activity. 

Let  it  be  emphasized  here  in  whatever  is  said 
about  the  tariff,  that  no  attack  is  made  at  this 
point  upon  the  doctrine  of  protection.  That 
subject  is  given  separate  treatment  elsewhere  to 
meet  its  own  nature.  The  tariff  and  protection 
ought  never  to  be  confounded  in  the  minds  of 
disputants  over  our  chronic  national  sore.  Here 
the  attack  is  solely  upon  the  obstruction  to  world- 
wide, honorable  and  profit-making  trade  by  a 
policy  which  may,  with  more  excuse  and  plausi- 
bility, find  some  other  avenue  whereby  to  attain 
its  object.  Instead  of  protecting  domestic  in- 
dustries by  deliberately  obstructing  trade  to  such 
a  degree  as  to  vitiate  materially  the  natural  con- 
ditions and  to  destroy  natural  advantages  of 
production,  the  end  of  protection  might  be  se- 
cured by  an  exemption  from  taxation,  or  by  a 
bonus  from  the  public  treasury  to  be  measured 
by  a  direct  percentage  upon  the  bona  fide  capital 
invested  —  say  one,  two  or  three  —  or  by  a  per- 
centage based  upon  tlie  market  price  of  the  prod- 
uct, or  by  a  percentage  of  the  value  of  the  gross 
sales  of  goods,  or  by  a  percentage  of  the  value 
of  the  competing  goods  brought  in  through  the 
custom  house,  or  by  any  other  way  easy  of  com- 
putation and  judged  to  be  equitable  between  the 
public  and  the  beneficiaries. 


WORLD  UNITY  AND  TRADE       241 

Now,  in  regard  to  the  political  organization  of 
the  world,  and  its  apparently  reasonable  and  in- 
evitable consequences  upon  trade  between  the 
merchants  and  manufacturers  of  the  nations,  per- 
mit first  brief  mention  of  the  resistless  tendency 
to  world  unity  which  promises  to  have  marked 
results   speedily. 

If  the  world  is  to  be  an  active  political  unity 
—  as  is  here  affirmed  —  it  must  have  organs  for 
action.  That  is,  it  must  have  legislative,  execu- 
tive and  judicial  branches  of  government.  The 
burden  of  proof  is  cheerfully  assumed.  In  the 
first  place,  regarding  the  world  legislative  branch, 
the  demonstration  is  easy  that  world  legislation 
has  already  been  accomplished  repeatedly  by  of- 
ficial action  of  the  nations.  It  has  not  been  in 
the  precise  form  familiar  to  the  mind  in  thinking 
of  legislative  action.  But  the  variation  from 
the  standard  method  has  not  affected  the  quality 
of  the  result,  and  it  ought  not  to  obscure  the 
full  contemplation  of  the  vital  nature  of  the  acts. 
This  variation  merely  marks  a  stage  in  the  polit- 
ical organization  of  the  nations  under  the  su- 
premacy of  world  sovereignty.  It  could  not 
have  been  reasonably  avoided  in  the  transition 
from  national  separateness  to  world  unity.  It 
was  inevitable  on  account  of  the  lack  of  acquaint- 
ance, of  the  distrust  and  the  unorganized  status 
of  the  nations.  It  will  disappear  when  the  full 
organic  unity  of  the  nations  shall  have  been  at- 
tained.    Legislation  is  the  expression  of  the  will 


242      THE  PASSING  OF  THE  TARIFF 

of  the  power  which  puts  in  formal  wording  the 
determination  of  its  mind  regarding  future  ac- 
tion upon  particular  matters.  World  legislation 
occurred,  in  the  full  and  perfect  sense  of  the 
word,  when  the  Universal  Postal  Union  was  es- 
tablished by  the  will  of  all  the  Powers  in  the 
world  which  were  sufficiently  organized  to  have 
a  government  as  a  means  of  expressing  their 
will,  when  they  agreed  to  the  Berne  proposition 
in  1874).  Again,  full  and  perfect  world  legisla- 
tion occurred  when  all  the  nations  gave  their  will 
to  the  establishment,  by  initiation  of  the  Hague 
Conference  of  1899,  of  the  Hague  Court  of 
Arbitration.  Ratified  recommendations  of  the 
Hague  Conference  of  1907  are  formal  and  ofli- 
cial  acts  of  genuine  world  legislation.  It  is  true 
that  the  international  delegate  body  which  for- 
mally originated  the  propositions  did  not  have 
legislative  power.  It  is  true  that  all  of  the  acts 
referred  to  were  not  operative  till  the  nations  sev- 
erally, up  to  an  agreed  number,  had  ratified  them. 
But  the  variation  from  the  commonly  accepted 
methods  of  legislation  does  not  in  the  slightest 
degree  invalidate  the  true  world  legislative  qual- 
ity of  the  acts.  In  over  a  score  of  other  cases 
of  less  perfection  of  illustration,  but  of  similar- 
ity in  quality,  world  legislation  has  occurred.  The 
world  legislature  is  thus  preceptibly  on  its  way 
to  realization,  and  the  fact  that  the  Hague  Con- 
ference has  been  the  originator  of  propositions 
resulting  in  world  legislation  and  is  the  most  re- 


WORLD  UNITY  AND  TRADE      243 

cent  illustration  of  delegates  from  all  nations 
acting  together  to  originate  world  legislation, 
makes  it  timely  to  work  in  order  that  the  Hague 
Conference  may  become  a  permanent  institution, 
with  the  bright  prospect  that,  out  of  it,  in  due 
time,  will  be  developed  the  perfect  form  of  the 
legislative  body  for  the  political  unit  of  all  man- 
kind. 

As  to  the  world  executive  department,  it  has 
already  begun  to  grow.  Several  separate  germs 
have  come  into  existence,  almost  simultaneously. 
Though  they  are  of  a  low  order  of  rank  and 
power,  yet  they  have  true  executive  quality,  and 
it  is  reasonable  to  forecast  that  they  will  be  suc- 
ceeded by  others  of  higher  grade  until  a  com- 
plex executive  organization  is  reached  under  one 
co-ordinating  head. 

Regarding  the  world  court,  while  it  has  not 
3'et  been  established  and  there  is  no  formal  code 
of  world  law  to  be  passed  upon,  yet  propositions 
have  been  made  for  a  codification  of  international 
law.  It  is  evident  that  the  exigencies  of  the  sit- 
uation and  the  growing  practice  of  joint  action 
by  the  nations  will  result  in  the  formal  ratifica- 
tion by  the  nations  of  certain  propositions  which 
already  have  standing  as  international  law.  By 
this  ratification,  that  part  of  international  law 
will  step  up  to  the  higher  status  of  world  law. 
This  code  of  world  law  will  be  developed  and  will 
be  added  to  as  necessity  demands,  and  the  formal 
establishment  of  a  world  court  cannot  be  long  de- 


SM      THE  PASSING  OF  THE  TARIFF 

layed.  The  Hague  recommendation  of  1907  to 
establish  an  international  prize  court  proposes  a 
true  judicial  bod}',  Avhich  may  be  the  germ  of  the 
world  judicially.  With  these  organs  established, 
there  will  be  realized  the  complete  organization 
of  the  world  into  one  political  bodj'^  under  the 
true  world  constitution  —  a  constitution  which 
must,  in  the  nature  of  the  case,  remain  unwritten. 

It  is  affirmed  here  with  full  assurance,  that  this 
world  unity  will  be  formally  realized  from  the 
forces  already  in  operation,  whose  results  are  be- 
ginning to  take  definite  fonn,  whether  or  not  the 
detailed  steps  have  been  set  forth  correctly,  and 
that  the  new  order  of  things  has  so  far  advanced 
that  the  old  tariff  era  has  ended  and  that  a  new 
era  has  begun  which  will  have  revolutionary  ef- 
fects upon  present  tariff  theories  and  practices. 
This  prospect  justifies  this  brief  review  of  world 
organization  already   accomplished. 

To  resume,  now,  the  discussion  of  the  tariff 
In  the  light  of  the  unifying  political  forces  of 
the  world.  One  of  the  certain  consequences  of 
world  unity  will  be  world  peace.  With  a  world 
court  for  the  settlement  of  differences  between 
nations  and  citizens  of  nations,  as  we  have  now  a 
system  of  national  courts  in  the  United  States  to 
settle  the  differences  between  the  states  and  the 
citizens  of  the  states,  there  would  be  no  more  oc- 
casion for  war  between  the  nations  than  there  is 
now  for  war  between  our  states.  A  better  way 
to  promote  the  peace  of  the  world  than  to  agi- 


WORLD  UNITY  AND  TRADE      245 

tate  directly  for  peace  is  to  work  for  the  politi- 
cal organization  of  the  world.  National  disarm- 
ament is  not  to  be  secured  most  quickly  by  trying 
to  reach  agreements  at  Hague  conferences,  but  by 
efforts  to  establish  such  relations  between  the  na- 
tions as  will  make  all  armaments  a  needless  and 
ridiculous  expense,  like  fortifying  one's  house 
against  bombshells  from  Mars,  and  then  the  evil 
will  die  of  its  own  curse,  with  nothing  said  offi- 
cially about  it. 

World  peace  will  bring,  and  even  the  prospect 
of  it  will  bring,  long  before  it  can  be  surely  writ- 
ten that  the  last  war  on  earth  has  occurred,  such 
closer  relations  between  the  nations  that  there 
will  be  a  great  development  of  commerce  all  over 
the  world.  Signs  of  joint  national  action  for 
the  promotion  of  trade  are  already  numerous. 
Commercial  congresses  and  international  confer- 
ences have  already  set  forth  in  some  detail  the 
plans  which  progressive  investors  have  for  the 
establishment  of  uniform  regulations  at  all  the 
custom  houses  in  the  world.  If  the  same  require- 
ments were  made  at  every  port,  of  every  vessel, 
no  matter  under  what  flag,  if  the  conditions  of 
lading,  inspection,  storage  and  departure  were 
the  same  in  every  part  of  the  world,  it  would  re- 
move many  of  the  annoyances  and  delays  of  trade 
and  would  stimulate  commerce  where  now  the  ex- 
asperations of  official  routine  are  a  serious  loss. 

Under  world  unity  there  would  doubtless  be 
established  early  some  uniform  practice  of  expa- 


246     THE  PASSING  OF  THE  TARIFF 

triation,  whatever  development  In  the  legal  status 
of  world  citizenship  might  come  later,  whereby 
rights  of  citizenship  In  new  countries  might  easily 
be  obtained  by  venturesome  men  leaving  their 
former  residences,  and  the  effect  would  be  to  take 
the  most  vigorous  stock  in  the  world  to  new  fields, 
to  transplant  it  with  better  prospects  th^n  ever 
before  of  friendly  relations  and  of  profitable 
dealings.  So  there  would  be,  at  a  thousand 
points,  enlargement  of  the  home  country's  for- 
eign markets  and  a  return  current  of  foreign 
goods  as  a  basis  of  a  new  crop  of  profits  as  they 
satisfied  new  wants  at  the  lowest  possible  cost. 

Extension  of  trade  based  upon  world  peace 
and  better  foreign  markets  would  give  rise  to 
demands  for  the  removal  of  obstacles.  Already 
this  demand  has  been  felt  In  the  discussion  of  a 
world  coinage  to  facilitate  the  exchange  of  goods 
between  people  of  different  standards.  It  has 
shown  itself  in  the  laws  for  the  adoption  of  the 
metric  system  of  weights  and  measures.  Re- 
peated efforts  to  Invent  an  international  language, 
whether  Volapuk  or  Esperanto  or  other  ingenious 
device,  are  in  part  an  echo  of  the  same  demand, 
and  whether  or  not  thousands  of  years  of  national 
traditions  are  to  be  overcome  by  artificial  devices, 
—  which  the  conservative  deny,  but  which  the 
hopeful  affirm, —  yet  there  can  be  no  doubt  that 
the  spread  of  trade  Avill  surely  reduce  the  obstacles 
by  the  acquired  habit  of  thinking  in  the  terms  o£ 
other  nations,  so  that  trade  itself  will  not  find  in 


WORLD  UNITY  AND  TRADE       247 

these  obstructions  as  serious  an  obstacle  as  it  finds 
now.  Ability  to  think  in  French,  German,  Rus- 
sian, Italian,  Spanish,  Japanese,  Chinese,  and  so 
on,  in  francs,  marks,  kopecks,  yen,  and  every 
other  well  known  measure  of  value,  extension  and 
weight  would  go  with  the  outfit  of  every  up-to- 
date  commercial  house  from  New  York  around  the 
world  to  San  Francisco,  and  trade  would  prosper 
as  the  barriers  of  thinking  in  intelligible  foreign 
terms  were  broken  down. 

But  it  must  not  be  overlooked  that  modem 
theories  of  public  service  corporations  are  under- 
going rapid  change.  Conservative  countries, 
like  England  and  Germany  give  us  many  illus- 
trations of  governmental  ownership  of  railroads 
and  telegraphs.  If  ever  the  principle  prevails 
to  the  general  adoption  of  popular  ownership  by 
the  people  of  the  several  nations, —  to  say  noth- 
ing of  world  ownership  under  the  doctrine  of 
world  sovereignty, —  it  may  be  accepted  as  abso- 
lutely certain  that  the  rates  for  passengers  and 
freights  will  be  so  low  that  onlv  the  cost  of  con- 
ducting  the  business,  without  dividends  or  profits, 
will  be  covered.  Such  a  status  would  lead  to  a 
vast  increase  of  travel  and  transportation. 
Without  such  popular  ownership  or  manage- 
ment, it  is  a  fair  prediction  that  a  great  increase 
will  be  seen  by  reduction  of  rates  with  the  pur- 
pose of  giving  the  utmost  stimulation  possible  to 
the  fascinating  and  contagious  practice  of  travel 
and  sight-seeing. 


248     THE  PASSING  OF  THE  TxVRIFF 

With  the  establishment  of  universal  peace  will 
come  the  liberation  of  millions  of  men  from  the 
destruction  of  property  to  its  creation.  Noth- 
ing short  of  a  revolution  in  the  economic  condi- 
tion of  the  world  will  be  the  consequence.  Wealth 
will  be  inconceivably  increased  and  its  distribution 
under  the  changed  conditions  will  affect  all 
classes.  With  the  energies  of  the  best  minds  left 
free  for  attention  to  industrial,  social  and  com- 
mercial evils,  instead  of  being  absorbed  by  the 
leechlike  demands  of  imperative  militarism,  the 
distribution  of  the  wealth  produced  by  the  world 
will  be  made  with  nearer  approximation  to  justice 
to  the  abilities  and  relative  contributions  of  the 
producers  than  at  present.  Less  industrial  des- 
potism and  more  positive  justice  will  increase  the 
purchasing  power  of  many  millions  of  people 
Avho  are  now  helpless  to  secure  their  rights,  and 
there  will  be  such  an  extension  of  trade  as  the 
world  now  sees  only  in  imagination.  All  this  en- 
largement of  trade  and  travel  will  bring  the  peo- 
ples of  the  world  into  better  acquaintance  with 
each  other. 

But  acquaintance  will  mean  friendship.  Hos- 
t'ls,  "  stranger,"  means  also  enemy,  and  removal 
of  strangerhood  will  remove  the  basis  of  much 
hostility.  Friendly  relations  all  over  the  world, 
promoted  by  trade  and  travel,  will  react  upon  the 
very  causes  which  promoted  them  to  strengi:hen 
them.  Trade  will  still  further  increase  and  the 
inevitable  efforts  to  remove  all  causes  which  re- 


WORLD  UNITY  AND  TRADE      249 

strict  it  will  be  redoubled.  It  is  certain  that  the 
cost  of  transportation,  the  construction  of  the 
shortest  and  most  economical  routes  of  travel, 
the  least  expensive  steamer  service,  the  fewest 
handlings  of  goods,  the  acme  of  engineering  skill, 
the  least  risks  from  fire,  flood  and  delay,  and 
every  item  which  enters  into  the  cost  of  carrying 
goods  around  the  world  will  be  the  subject  of 
the  most  scientific  study  the  world  of  commerce 
can  command.  It  is  impossible,  in  the  light  of 
this  general  demand  for  the  least  possible  ob- 
struction to  the  transportation  of  goods,  that  any 
artificial  obsti-uction  should  escape  the  most  per- 
emptory challenge.  Again,  therefore,  it  is  cer- 
tain that  the  tariff  would  be  compelled  to  face  the 
most  modem  and  most  searching  requirements. 

In  these  various  directions  mentioned,  there  will 
be  operative  mighty  forces  for  the  complete  re- 
moval of  all  obstruction  to  trade.  That  the  tar- 
iff is  an  obstruction  is  conceded  on  every  hand. 
Its  very  design  is  to  obstnict.  That  is  why  its 
friends  have  established  it  in  every  country  where 
it  prevails, —  in  order  that  home  markets  might 
be  benefited  by  the  exclusion  of  foreign  goods 
kept  out  by  the  presence  of  this  artificial  obstacle. 
Its  opponents  make  it  their  vital  point  against  it, 
that  it  is  an  obstacle,  and  that  it  causes  the  de- 
struction of  incalculable  millions  of  potential 
wealth.  That  it  is  a  wholly  artificial  obstruction 
is  beyond  question.  A  new  and  general  and  vig- 
orous protest  against  the  tariff  must  be  faced  by 


250      TPIE  PASSING  OF  THE  TARIFF 

its  friends,  unless  they  can  meanwhile  persuade  the 
■world  that  protection  cannot  be  as  well  secured 
without  this  destruction  of  wealth  which  would 
exist  were  it  not  for  the  tariff,  that  no  other  form 
of  protection,  of  the  several  which  can  be  sug- 
gested, will  so  largely  contribute  to  the  welfare 
of  the  nations,  and  that  the  benefits  of  protection 
(which  tends  to  restrict  trade  and  travel  and  com- 
mercial and  social  intercourse  generally)  more 
than  offset  the  evils  other  than  financial  which  it 
certainly  causes. 

It  must  be  remembered,  in  this  world  outlook 
over  the  situation,  that  the  advent  of  world  peace 
will  greatly  promote  the  friendliness  of  the  peo- 
ple of  the  different  nations.  But  a  material  ele- 
ment of  the  protective  policy  todaj^  is  the  mutual 
jealousy  and  distrust  of  the  nations.  Today  a 
calamity  to  the  producers  of  Europe  is  welcomed 
in  the  United  States  as  if  it  were  a  benefit  to  tlie 
latter  country,  as  if  the  purchasing  power  of 
possible  customers  could  be  seriously  crippled 
with  corresponding  profit  to  the  producers  who 
would  otherwise  sell  to  them,  but  must  now  see 
their  market  closed.  In  place  of  tliis  mole-eyed 
view  of  national  calamity,  in  place  of  this  jealousy 
of  the  prosperity  of  commercial  rivals,  in  place  of 
the  view  that  foreign  producers  are  enemies,  will 
come  the  true  view  that  all  who  contribute  to  the 
wealth  of  the  world  are  benefactors  of  the  world 
and  that  the  welfare  of  the  world  will  be  promoted 
by  prosperity  at  every  point. 


WORLD  UNITY  AND  TRADE       251 

A  side  observation  is  pertinent  here  to  the  effect 
that  the  supporters  of  the  tariff  in  the  face  of  its 
tendency  to  restrict  trade  and  travel  and  the  social 
intercourse  of  the  world,  which  it  is  its  avowed 
purpose  to  do,  must  be  ready  to  identify  them- 
selves publicly  with  the  non-progressive  and  re- 
pressive forces  which  tend  to  keep  nations  sep- 
arate from  each  other,  which  would  promote  in- 
ternational jealousies  and  hostilities  and  which 
see  in  progress  and  world-wide  friendship  only 
the  powers  which  make  for  their  own  destruction. 
Doubtless  many  tariff  men  will  protest  that  they 
are  not  of  that  type  of  citizens,  but  the  challenge 
is  made  to  them  confidently,  considering  all  that 
is  involved  in  the  divisive  effect  of  the  tariff,  to 
prove  that  they  are  not.  It  cannot  but  help  to 
clear  up  the  issue  and  to  influence  the  allegiance 
of  voters  to  have  this  point  brought  into  the 
light  where  men  must  pass  upon  it  with  their  own 
judgment  and  let  the  world  know  upon  which 
side  they  are  to  be  counted. 

With  world  organization  an  accomplished  fact, 
with  wars  ended  by  universal  peace,  with  produc- 
tion vastly  increased  by  the  shifting  of  armies 
from  destruction  to  construction,  with  national 
jealousies  removed  and  confidence  substituted, 
with  a  juster  distribution  of  wealth  to  the  great 
increase  of  the  purchasing  power  of  the  masses 
of  the  people,  with  a  great  addition  to  the  mar- 
kets of  the  world  by  mutual  concessions  in  re- 
moving tariff  obstacles,  with  the  desire  for  travel 


252     THE  PASSING  OF  THE  TARIFF 

increased  by  what  it  feeds  upon,  with  obstruc- 
tions of  race  and  language  reduced,  with  differ- 
ences in  coinage,  weights  and  measures  diminished 
to  the  smallest  possible  amount,  with  other 
changes  in  the  relations  of  the  nations  to  each 
other  officially  and  of  their  peoples  unofficially 
which  may  be  imagined  in  further  detail,  it  is 
evident  that  a  stronger  challenge  than  ever  will 
be  made  to  a  purely  artificial  obstruction  of 
trade  —  if  there  is  anything  whatever  left  of  it 
by  the  time  the  era  of  full  world  organization  ar- 
rives. In  its  very  nature  the  tariff  is  so  flatly  op- 
posed to  each  and  all  of  the  forces  which  make 
for  the  unity  and  progress  of  the  world  that  it 
is  impossible  to  see  how  any  tariff  champion  can 
reconcile  his  principles  with  the  world  conditions 
which  this  progress  will  surely  bring.  Inherent 
antagonism  exists  between  the  two  sides  in  the 
contest.  Neither  can  tolerate  the  other,  for 
neither  can  have  its  full  development  in  the  pres- 
ence of  the  other,  and  the  stronger  must  destroy 
the  other. 

Looking  at  the  progress  of  the  nations  in  the 
direction  of  world  unity  within  the  last  few  years 
and  realizing  that  this  has  not  been  made  intelli- 
gently with  world  unity  as  the  end  in  view,  but 
only  blindly  in  obedience  to  the  world  forces  which 
are  pushing  the  nations  onward  unconsciously  to 
the  great  consumation,  it  is  impossible  to  with- 
hold the  conclusion  that  these  world  forces,  driv- 
ing the  nations  forward,  step  by  step,  from  one 


WORLD  UNITY  AND  TRADE      253 

manifest  gain  to  another,  will  surely  bring  about 
the  utter  destruction  of  all  artificial  obstacles  in 
the  way  of  trade.  Natural  obstacles  must  re- 
main in  modified  form.  But  the  annihilation  of 
time  and  space  will  be  as  nearly  perfect  as  the  im- 
proved invention  of  man  can  devise,  and  every  im- 
provement, cheapening  the  cost  of  exchanging 
goods,  will  be  a  real  increase  of  the  wealth  of  the 
world.  Trade  will  thus  gradually  free  itself  from 
artificial  obstructions,  and  when  they  shall  have 
been  removed  so  that  natural  ones  only  shall  re- 
main, then  we  shall  be  justified  in  saying  that  the 
day  of  absolute  free  trade  has  arrived.  Indica- 
tions are  that  the  nations  have  already  entered 
upon  the  new  era  which  will  end  only  with  tins 
wealth-creating  consummation. 


CHAPTER  XXI 
WORLD  TRADE  AND  WORLD  PEACE 

Up  to  date  morals  has  not  been  included  as  a 
part  of  economics.  But  the  broad  principle  that 
all  truths  are  parts  of  one  comprehensive  truth 
brings  both  into  one  field,  and  there  is  a  much 
closer  unity  than  that.  Although  it  is  a  current 
complaint  among  church  members  that  the  church 
does  not  reach  the  mass  of  the  people,  yet  there 
is  no  parallel  assertion  that  the  Nazarine  is  any 
less  highly  respected  and  worshiped  in  the  hearts 
of  men,  or  that  his  principles  have  lost  their  grip 
in  human  affairs,  or  that  the  majority  of  man- 
kind is  descending  to  a  lower  depth  of  moral 
degradation.  Such  assertion  would  belie  the 
common  conviction  of  the  civilized  nations  today. 
It  would  deny  the  existence  of  the  great  phil- 
anthropic movements  and  institutions  of  the 
century  which  are  essentially  the  fruit  of  Chris- 
tianity and  of  nothing  else.  It  would  ignore 
the  new  and  resistless  formal  effort  for  the  estab- 
lishment of  world  peace.  It  would  be  blind  to 
the  convincing  and  onsweeping  current  of  events 
which  make  for  the  organized  political  unity  of 
all  the  nations  under  recognized  world  sov- 
ereignty. 

But,  in  spite  of  the  failure  of  many  who  live 
Christian  lives  to  identify  themselves  with  the 
254. 


TRADE  AND  WORLD  PEACE      255 

Christian  cliurch,  in  spite  of  the  immoral  lapses 
of  individuals,  in  contrast  with  the  moral  ad- 
vance of  the  majority  of  the  inhabitants  of  the 
earth,  there  is  certainly  less  of  a  predatory  dis- 
position in  the  relations  of  buyer  and  seller,  a 
more  frequent  recognition  of  the  truth  that  in 
every  legitimate  commercial  transaction  both 
parties  ought  to  make  a  profit,  and  a  more  wide- 
spread willingness  to  live  and  to  let  live  than 
ever  before.  If  we  take  the  testimony  of  mer- 
chants and  manufacturers  who  have  been  many 
years  in  business,  we  must  admit  that  business 
ethics  are  higher  today  than  ever,  notwithstand- 
ing present  lamentable  offenses,  both  individual 
and  corporate,  and  though  only  a  few  years  ago 
plausible  reasons  could  be  given  for  saying  that 
morality  in  general  was  lax  and  losing  its  power. 
Morals  is  today  such  a  vital  element  of  business 
that  a  revolution  for  the  Avorse  would  occur  if  the 
present  reliance  upon  the  unsupported  personal 
word  of  mouth  of  business  men  from  the  manu- 
facturer and  merchant  down  to  the  keeper  of 
the  corner  grocery  were  destroyed.  Business 
rests  upon  truthfulness  and  friendship  between 
the  parties  more  than  ever,  and  the  more  each  side 
has  implicit  confidence  in  the  character  of  the 
other  and  the  more  each  side  realizes  that  the 
other  side  is  desirous  of  promoting  the  other's  in- 
terests, as  well  as  its  own,  the  more  business  will  be 
done,  the  more  profits  will  be  made,  the  more 
rapid  and  more  abundant  will  be  the  increase  of 


256      THE  PASSING  OF  THE  TARIFF 

the  ■world's  wealth  and  the  more  will  each  private 
individual  gain  by  the  general  prosperity  of  the 
whole. 

Slowly  has  the  world  come  to  this  moral  condi- 
tion, but  it  has  come  at  last.  If  civilization  and 
Christianity  mean  anything,  the  world  will  not 
relapse  to  its  lower  level.  We  are  not  only  safe 
in  calculating  upon  this  condition  as  perma- 
nent, but  we  are  false  to  the  fact  if  we  ignore  it. 
Our  forecast  of  future  trade  relations  will  be  es- 
sentially in  error  if  we  omit  this  vitally  import- 
ant force. 

While  trade  necessarily  depends  upon  profit 
for  its  existence,  yet  it  will  henceforth  recognize 
more  than  ever  —  and  we  do  not  gush  in  mere 
philanthropy  over  the  fact,  but  calmly  reckon  it 
as  an  assent  of  our  cause  —  the  truth  that  justice 
and  friendliness  must  be  obser^'ed,  and  that  they 
are  a  vital  element  of  international  trade  and 
communication.  Again  we  see  that  a  new  era  is 
truly  here,  and  that  the  year  1900  A.D.,  is  as  truly 
past,  if  not  in  as  distant  a  past,  as  1800  and 
1700  and  all  the  numberless  hundreds  before 
them.  The  standards  of  1900  are  as  truly  out 
of  date  as  those  of  the  previous  centuries,  and  its 
motives  and  its  morality  are  equally  things  of  the 
past.  With  all  shiploads  of  manufactures  of  the 
United  States  which  go  to  the  thousand  ports  of 
other  countries  will  go  also  the  recognition  of  the 
owners  that  the  largest  profits  will  be  made  by 
just  treatment  of  every  foreigner  who  buys  the 


TRADE  AND  WORLD  PEACE      257 

goods,   and  by  the  cultivation   of  friendly   rela- 
tions with  him  and  with  his  people. 

This  will  be  done  from  commercial  motives,  if 
from  no  other,  but  it  is  true  that  the  higher 
motive  has  been  developed  and  that  it  has  come 
to  stay.  Traders  who  do  business  on  the  lower 
levels  of  morals  will  find  it  for  their  interest  to 
rise  to  the  higher  levels.  The  world  will  demand 
recognition  of  the  better  standard  of  practice. 
Offenders  will  pay  the  penalty  by  the  loss  of 
trade.  Fair  dealing  will  promote  further  fair 
dealing.  Courtesy  will  stimulate  further  cour- 
tesy. Victimizing  foreign  customers  will  so  react 
that  the  victimizers  will  be  their  own  heaviest- 
losing  victims.  Profits  will  depend  not  only 
upon  honesty  embodied  in  the  goods,  but  also 
upon  the  friendly  feeling  and  courteous  manner 
with  which  trade  is  conducted.  This  is  only  say- 
ing that  what  has  come  to  be  true  in  our  own 
country  today  in  regard  to  trade  will  also  come 
to  be  true  in  foreign  trade  because  it  is  based 
upon  traits  of  human  nature  as  universal  and  as 
sensitive  in  Europe,  Asia  and  Africa  as  they  are 
in  Boston,  New  York  and  Chicago.  Any 
doubter  need  only  be  referred  to  the  marked  dif- 
ferences between  now  and  even  ten  years  ago  in 
the  practices  of  the  large  retail  stores  in  retain- 
ing and  soliciting  trade  to  be  absolutely  sure  that 
a  new  order  of  treatment  has  arrived,  while  the 
old  has  silently  and  ignominiously  sneaked  away. 

Trade    all    over    the    world,    therefore,    under 


258      THE  PASSING  OF  THE  TARIFF 

modern  conditions  of  justice  and  courtesy,  is  sure 
to  be  a  powerful  force  for  the  peace  of  the  world. 
Profit  and  prosperity  cannot  come  with  war  and 
dcstmction.  To  go  to  war  is  to  destroy  one's 
markets.  The  assertion  that  trade  follows  the 
flag  is  already  a  discovered  and  a  discredited 
falsehood.  Trade  follows  the  line  of  largest 
profits.  Capital,  notoriously  timid,  goes  most 
abundantly,  profits  being  equal,  where  there  is 
the  best  security.  Self  interest,  as  well  as  al- 
truism, makes  for  justice  and  courtesy  in  commer- 
cial dealings  with  every  customer  in  every  quarter 
of  the  globe,  be  he  white  or  black,  or  red  or  brown 
or  yellow. 

It  is  only  within  a  few  years  that  business 
men's  organizations,  as  such,  have  become  identi- 
fied all  over  the  country  wuth  the  Mohonk  arbi- 
tration movement.  That  they  have  become  so 
identified,  that  they  give  attention  to  the  subject 
officiall}^  and  that  a  part  of  the  program  is  given 
over  to  them  exclusively  in  order  that  they  may 
present  to  the  conference  and  to  the  world  their 
direct  interest  in  the  prevention  of  w^ar,  shows 
how  desirous  they  are  to  establish  conditions  fa- 
vorable to  trade  in  all  parts  of  the  world.  A 
logical  consequence  of  this  attitude  of  the  busi- 
ness men  is  that  they  will  use  their  organized  in- 
fluence for  the  peace  of  the  world  as  soon  as  their 
movement  shall  have  had  time  to  develop,  and  that 
day  will  probably  come  very  soon. 

Trade    binds    men    together    in    all    countries. 


TRADE  AND  WORLD  PEACE     259 

But  back  of  the  trade,  as  a  force  in  the  transac- 
tion, is  the  human  nature  in  the  persons  who  do 
the  trading,  and  even  that  human  nature  would 
not  make  the  tie  if  it  were  not  for  the  conscious 
brotherhood  back  of  it.  To  the  ultimate  unity 
of  the  race,  therefore,  the  trade  status  reverts  for 
its  final  explanation.  But  trade  is  the  occasion 
of  the  movement  toward  unity,  not  philanthropy 
in  any  large  degree,  and  if  any  one  refuses  to  ac- 
cept this,  but  prefers  to  accept  a  lower  explana- 
tion, let  him  say  that  trade  is  the  force  which 
binds  men  together  and  let  him  stop  with  that. 

Now,  then,  with  trade  binding  men  together 
in  all  countries,  they  have  a  friendly  understand- 
ing and  a  common  object  in  working  for  peace. 
They  can  work  together  because  the}^  are  friends. 
They  want  to  make  profit  by  trading,  and  they 
are  none  the  less  friends  because  they  propose 
to  make  money  out  of  each  other.  They  have 
reached  the  stage  where  they  realize  that  each  is 
able  to  trade  because  he  has  a  natural  advantage 
in  the  production  of  the  goods  he  has  to  sell, 
and  the  strength  of  his  desire  to  get  the  goods  of 
the  other  is  the  measure  of  his  price  for  his  own. 
Each  trader,  unofficially,  infonnallj',  but  none  the 
less  really,  by  virtue  of  his  economic  function  as 
a  member  of  the  community,  represents  the  mass 
of  the  people  who  patronize  him  or  who  do  their 
business  through  him,  and  therefore  prices  fixed 
by  traders  are  the  measures  of  the  desires  of  the 
several  communities  to  trade  with  each  other,  and 


260     THE  PASSING  OF  THE  TARIFF 

friendly  relations  of  the  communities  themselves 
are  a  prior  condition  to  friendly  relations  and  to 
trade  between  the  traders  personally. 

Relations  of  friendship  and  of  mutual  profit 
existing  between  communities,  see  what  w'ill  be 
the  effect  upon  public  sentiment,  if  no  occasion 
for  quarreling  be  given.  Militarism  must  fall 
into  discredit.  Here  is  a  positive  consequence  of 
tliis  movement  of  business  men.  We  are  in  a 
transition  stage  just  now,  but  the  current  is  run- 
ning strongly  against  militarism  and  it  is  certain 
to  run  until  the  public  spirit  which  makes  for 
war,  or  even  which  prepares  for  war  as  the  best 
means  of  promoting  peace,  will  be  smothered  and 
extinguished  by  the  lack  of  exercise  and  by  the 
condemnation  of  public  sentiment.  We  are  now 
in  the  era  of  military  training  for  boys  In  public 
and  private  schools,  of  the  unification  of  the  state 
militias  and  the  national  control  of  all  our  armed 
men,  of  larger  armies  and  of  many  great  battle- 
ships. We  are  in  the  j^ears  when  the  public 
judgment,  not  yet  out  of  the  wilds  of  barbarism 
and  not  yet  entered  into  the  peaceful  arena  of 
world  unity  and  world  brotherhood,  compromises 
between  two  incompatible  positions.  It  knows 
that  peace  is  right,  is  best  and  is  most  profitable. 
But  with  the  brute  still  surviving  in  its  blood 
and  brain,  it  forecasts  collision,  bloodshed  and  a 
death-grapple  of  nation  with  nation.  Hence  it 
advertises  its  folly  and  its  brutishness.  It  pro- 
claims its  inability  to  stand  by  the  demonstration 


TRADE  AND  WORLD  PEACE      S61 

of  its  own  reason.  It  confesses  its  treason  to  its 
own  Christ  and  it  arms  for  war.  It  fails  to  real- 
ize that  the  military  profession,  in  its  ultimate 
analysis,  will  be  hereafter  the  most  degraded  of 
all  occupations  a  human  being  can  follow,  what- 
ever honor  it  holds  now  or  has  held,  and  it  talks 
of  duty  and  patriotism  in  utter  defiance  of  the 
higher  duty  to  recognize  the  brotherhood  of  all 
nations  and  in  ignorance  of  that  patriotism  — 
the  only  patriotism  worthy  of  the  name  or  up 
with  the  times  —  which  takes  in  all  the  nations 
and  is  absolutely  sure  that  in  the  right  relations 
of  all  classes  and  races  war  between  the  parts  of 
mankind  is  totally  impossible. 

Out  of  this  transition  stage  we  are  sure  to 
come,  and  doubtless  will  come  speedily.  Busi- 
ness men  will  be  the  foremost  actors.  Those  who 
have  goods  to  sell  abroad,  representing  the  com- 
munity behind  them  —  and  this  will  be  true  of 
other  countries  as  well  as  of  our  own  —  will  lead 
the  way  in  laying  the  pennanent  foundations  of 
peace.  Military  men  will  not  only  be  under  the 
righteous  and  terrible  condemnation  of  popular 
judgment  as  creatures  who  will  sacrifice  con- 
science and  personality  in  obedience  to  unright- 
eous officers,  and  who  destroy,  ravish  and 
slaughter  fellow  men  rather  than  settle  their  dif- 
ferences by  reason  and  by  justice,  but  they  will 
be  under  the  added  ridicule  and  contempt  of  the 
entire  community  as  the  most  foolish  class  of  men 
on  the  face  of  the  earth.     With  the  sober  sense 


262       THE  PASSING  OF  THE  TARIFF 

of  the  community  against  them,  with  no  excuse 
for  existence  but  tlie  sumival  of  the  brute, 
woman's  silly  admiration  for  brass  buttons  and 
shoulder  straps,  and  a  groundless  fear  of  future 
wars,  the  militaiy  profession  will  become  so  un- 
popular that  it  Vvill  fail  to  secure  government  ap- 
propriations, and  then  its  days  will  be  numbered. 
Out  of  the  Mohonk  stage  of  the  business  men's 
orgaaization  for  peace,  it  is  reasonable  to  predict, 
will  come  international  business  men's  organiza- 
tions for  world  trade.  If  our  mei'chants  and 
manufacturers  from  Boston  to  San  Francisco  can 
organize  and  work  in  this  country  for  the  pro- 
motion of  conditions  to  favor  world  trade,  it 
is  equally  possible  and  practical  for  the  busi- 
ness organizations  in  the  different  countries  to 
come  into  touch  with  each  other  and  to  exert 
their  influence  upon  all  governments  simultane- 
ously for  the  promotion  of  that  peace  all  over  the 
world  which  will  foster  the  largest  possible  de- 
velopment of  business.  It  is  perfectly  feasible 
for  boards  of  trade,  chambers  of  commerce,  mer- 
chants' associations  and  similar  organizations  in 
all  countries  where  they  exist  to  make  a  world 
organization  among  themselves.  To  them,  as  a 
most  willing  and  powerful  factor,  would  be  added 
the  great  transportation  interests  everywhere, 
and  it  is  only  necessary  to  allude  to  the  vast 
political  power  of  the  transcontinental  and  trans- 
oceanic railroad  and  steamship  companies  to  show 
how  absolutely  such  a  combination  would  control 


TRADE  AND  WORLD  PEACE     263 

the  policies  of  every  civilized  country  on  the  face 
of  the  earth. 

In  the  United  States  we  know  how  the  political 
power  responds  to  the  popular  sentiment.  Our 
politicians,  even  our  presidents,  rarely  have  poli- 
cies contrary  to  the  judgment  of  the  great  ma- 
jority of  the  people.  Public  opinion  is  our  mas- 
ter and  our  guide.  Martyrs  to  it  we  have  in  the 
cause  of  progress,  but  martyrs  to  it  in  the  cause 
of  retroaction  and  barbarism  we  are  not  likely 
to  have.  Militarism  does  not  breed  the  martyr 
spirit.  Other  nations  will  feel,  as  we  shall  feel, 
the  momentum  of  the  business  men's  movement. 
All  the  force  of  organized  labor  will  be  exerted 
on  the  same  side,  for  labor  is  already  pledged  to 
the  cause.  Even  military  Germany  cannot  resist 
Buch  a  combination  of  business  men  and  labor, 
with  all  its  radical  thinkers  enlisted  for  peace, 
and  when  Germany,  which  now  professes  peace  as 
the  object  of  its  arms,  ceases  to  menace  the 
other  nations  and  so  removes  their  excuse  for  arm- 
ing, then  the  new  era  will  have  so  fully  come  that 
it  will  only  be  necessary  to  observe,  as  speedily 
as  possible,  the  formal  interment  of  the  putrefy- 
ing corpse  of  militarism. 

Trade  and  war  are  incompatible.  Such  ex- 
ceptions as  may  be  cited  can  exist  only  by  evasion 
of  the  full  sense  of  each  of  these  words.  Trade 
represents  the  progress  of  civilization  and  the 
spread  of  Christianity.  Only  its  abuse  is  to  be 
despised   and    condemned   as    sordid   and   unjust. 


264<     THE  PASSING  OF  THE  TARIFF 

It  is  essential  for  the  existence  of  the  human  race. 
It  may  be,  should  be,  and  doubtless  will  be, 
elevating  and  noble  in  its  methods  and  associa- 
tions. War  belongs  to  the  brute  past  and  is 
rapidly  being  relegated  there.  It  is  on  the  de- 
fensive, weak  and  apologetic.  Today  it  has  no 
excuse  for  being  between  the  great  nations,  and 
they  can  police  the  savages  of  the  world.  Trade 
is  aggressive,  strong,  and  apologizes  to  no  one 
for  its  existence  or  its  attitude.  Its  mighty  in- 
fluence is  for  peace,  and  it  is  as  sure  to  win  as 
there  is  brain  and  will  in  the  human  race. 

World  trade,  therefore,  makes  for  world  peace, 
and  every  one  who  believes  that  peace  is  better 
than  war  is  by  that  fact  allied  with  the  forces 
which  make  for  the  extension  of  free  and  profita- 
ble trade  to  every  place  where  a  vessel  can  find  a 
landing  or  where  the  wheels  of  a  vehicle  or  the 
pack  of  a  pedler  can  go. 


CHAPTER  XXII 

WHEN  TARIFF  REDUCTION  COMES 

Whenever  an  appreciable  reduction  of  the  tar- 
iff comes,  unless  business  conditions  are  abnor- 
mally favorable  to  prosperity,  it  is  probable  that 
the  temporary  effect  will  disappoint  the  friends 
of  the  reduction,  encourage  its  opponents,  and 
try  the  faith  of  that  uncertain  public  which  is 
watching  the  experiment.  So  clear  and  concise 
a  statement  of  the  operation  of  forces  at  a  time 
of  reduction  has  been  made  by  Professor  Garrett 
Droppers  to  the  author  that  the  substance  of  his 
words  Is  reproduced  here  as  a  caution,  and  an  en- 
couragement to  those  who  do  not  favor  the  pres- 
ent tariff.  He  was  formally  Professor  of  Politi- 
cal Economy  In  the  University  of  Chicago,  and 
Is  now  an  occupant  of  the  chair  In  the  same  de- 
partment In  Williams  College  —  one  of  the  youn- 
ger generation  of  political  economists  who  are 
watching  the  latest  manifestations  of  economic 
tendencies,  as  well  as  studying  the  principles  as 
expounded  by  the  earlier  schools.  As  he  puts  It, 
the  Immediate  effect  of  the  Increase  of  duty  would 
be  to  give  to  a  community  a  temporary  pros- 
perity. Protected  interests  would  feel  the  stimu- 
lus of  the  removal  of  competition  and  apparent 
prosperity  would  prevail.  People  would  be  de- 
ceived, and  would  suppose  that  general  improve- 
265 


266      THE  PASSING  OF  THE  TARIFF 

merit  of  business  had  begun,  but  if  the  condition 
of  the  whole  community  could  be  learned,  this 
prosperity  would  be  found  to  be  an  illusion. 
The  whole  is  scattered  and  the  true  condition  is 
unmeasurable ;  hence  a  mistaken  belief  becomes 
popular,  and  the  tariff  is  regarded  as  the  real 
cause  of  prosperity. 

On  the  other  hand,  suppose  that  the  duty  were 
cut  In  two ;  the  first  effect  on  the  protected  in- 
terests at  the  center  of  the  community  would  be 
to  depress  their  business.  Some  lessening  of 
prosperity  might  seem  to  rest  upon  them.  Peo- 
ple generally  would  question  whether  the  new 
policy  were  right.  Those  who  favored  tariff  re- 
duction must  expect  that  the  first  effect  will  be 
against  them,  and  will  continue  until  business  has 
become  adjusted  to  normal  conditions.  "  The 
tariff,"  says  Professor  Droppers,  "  is  a  stimu- 
lant at  first  in  promoting  business.  Its  effect 
is  very  much  like  that  of  brandy  upon  a  person 
not  accustomed  to  it,  but  as  the  system  becomes 
habituated  to  its  use,  the  first  effect  cannot  be 
continued,  and  finally  the  bad  effects  of  the  stimu- 
lus are  felt  through  all  the  system.  It  is  far 
better  for  the  health  of  the  community  to  return 
to  a  cold  water  basis  and  stay  there." 

A  further  view  of  the  situation  given  by  Pro- 
fessor Droppers  is  so  unfamiliar  to  most  men  who 
debate  the  tariff,  and  is  so  important  as  a  politi- 
cal proposition  that  it  is  well  worthy  of  the  at- 
tention of  all  the  voters  of  the  United  States,  in 


WHEN  REDUCTION  COMES      !267 

Ills  earnest,  vigorous  setting  forth  of  the  pros- 
pects of  obtaining  lower  duties.  He  refers  to 
the  need  of  a  better  banking  and  credit  system 
which  may  give  vigorous  assistance  to  the  produc- 
ing industries  whenever  a  tariff  reduction  takes 
place.  At  present  the  banking  system  in  this 
country  is  so  delicately  adjusted  that  at  any  mo- 
ment it  may  lose  its  power  to  protect  the  very 
interests  that  stand  most  in  need  of  it,  especially 
at  a  critical  moment.  The  reform  of  the  tariff, 
he  believes,  is  more  or  less  endangered  as  a  suc- 
cessful national  policy,  until  there  has  been  a 
reorganization  in  the  currency  system.  The 
Professor's  position  is  substantially  as  follows: 

It  is  not  difficult  to  prove  that  as  at  present 
constituted  the  industries  of  our  country  would 
be  vastly  benefited  by  a  reduction  of  the  tariff. 
With  every  development  in  the  productive  ener- 
gies of  the  United  States  there  is  a  demand  for 
cheaper  and  larger  supplies  of  raw  material. 
This  increase  in  demand  cannot  be  obtained  on 
favorable  terms,  unless  there  is  a  very  substantial 
reduction  in  the  duties  now  imposed.  There  is 
scarcely  a  manufacture  of  importance  which  can- 
not be  enlarged  were  only  cheaper  supplies  forth- 
coming from  those  countries  still  engaged  in  the 
so-called  extractive  industries.  By  means  of  the 
tariff  these  countries  are  largely  shut  off  from 
profitable  trade  with  the  United  States. 

But  when  such  a  reduction  in  the  tariff  takes 
place  there  will  be  naturally  some  diminution  of 


268      THE  PASSING  OF  THE  TARIFF 

prices,  particularly  in  certain  lines  of  industry. 
This  change  is  always  a  trying  one  and  inspires 
a  fear  in  certain  quarters  that  profits  will  be  di- 
minished. It  is  of  great  importance  that  in  such 
a  transition  period  producers  should  be  able  to 
rely  in  all  legitimate  ways  upon  an  abundance 
of  credit  to  tide  them  over  the  period  of  transi- 
tion. If  at  such  a  time  the  government  could  as- 
sure the  manufacturing  and  other  commercial  in- 
terests of  the  country  that  such  assistance  was 
forthcoming,  it  would  tend  to  remove  certain 
fears  which  are  now  widely  entertained.  To  use 
a  figure  of  speech,  quoted,  if  a  man  is  to  abandon 
the  use  of  stimulants  he  should  at  least  have  suf- 
ficient food  and  drink  of  the  right  kind  to  sustain 
him  in  vigor. 

At  present,  through  certain  provisions  of  the 
national  banking  system,  there  is  always  a  dan- 
ger that  the  credit  demanded  by  manufacturing 
and  mercantile  concerns  will  not  be  forthcoming. 
Such  a  condition  would  be  impossible,  if  there 
were  established  in  this  counti*y  an  effective  bank- 
ing system,  more  or  less  under  the  control  of  the 
government,  which  could  not  only  assure  to  these 
interests,  but  could  assure  to  the  other  banks  am- 
ple relief  in  case  of  emergency'.  The  central 
banking  system  adopted  in  each  of  the  countries 
of  Europe  adequately  provides  for  just  this  situa- 
tion. Such  a  bank  would  have  power  to  expand 
its  note  issues  under  certain  restrictions  and 
would  prevent  all  loss  of  confidence  on  the  part 


WHEN  REDUCTION  COMES       269 

of  depositors  and  borrowers  whenever  an  extraor- 
dinary demand  arose  for  credit.  Such  a  bank  in 
the  full  light  of  public  opinion,  and  with  the 
guarantee  of  the  government  behind  it,  would  be 
able  to  provide  an  entirely  elastic  system  of  cur- 
rency, and  a  sound  system  of  credit ;  whereas,  un- 
der the  present  system  each  bank  is  forbidden  by, 
law  to  extend  its  loans  whenever  a  fear  becomes 
imminent  that  a  crisis  is  at  hand.  In  fact,  under 
the  present  system  of  banking  a  few  men  can  pre- 
cipitate a  money  crisis  in  this  country  whenever 
it  suits  their  purposes  to  do  so.  Each  bank  is 
forced  by  the  provisions  of  the  National  Bank 
Act  to  look  out  for  itself  at  the  expense  of  the 
very  interests  it  is  designed  to  protect.  Such  a 
state  of  things  would  be  wholly  impossible  under 
the  administration  of  a  large  central  bank  on  the 
model  of  the  Reichsbank  of  Germany.  Its  power 
to  expand  its  circulation  under  certain  restric- 
tions is  practically  unlimited,  and  yet  with  this 
expansion  of  circulation  no  question  of  the  sol- 
vency of  the  bank  can  possibly  arise. 

It  is  of  course  possible  that  the  change  to  a 
lower  tariff  level  would  not  be  accompanied  by 
any  business  reaction  or  loss  of  bank  confidence. 
At  any  rate,  the  period  of  reaction  must  be  brief 
for  the  expansion  of  those  industries  that  are 
now  hampered  by  the  restrictions  of  the  tariff, 
and  the  consequent  enlargement  of  the  markets 
of  the  country  will  soon  make  good  any  tempor- 
ary   set-back.     Under    the    present    efficiency    of 


270      THE  PASSING  OF  THE  TARIFF 

machinery  and  labor  in  the  United  States  it  is 
hard  to  see  how  any  revolutionary  re-adjustment 
would  be  necessary  in  any  important  line  of  pro- 
duction. The  testimon}'  of  manufacturers  seems 
to  be  quite  inconsistent  on  this  head.  The  evi- 
dence from  these  quarters  during  periods  of  pros- 
perity is  that  America  can  manufacture  more 
cheaply  than  any  country  of  the  world.  One 
has  but  to  recall  the  almost  extravagant  state- 
ments of  Mr.  Schwab  with  regard  to  the  cost  of 
production  of  steel  rails  in  this  country,  as  com- 
pared with  the  cost  abroad.  Similar  opinions 
are  often  heard  from  men  who  are  connected  with 
the  most  highly  protected  interests.  But  when 
any  definite  effort  is  threatened  to  reduce  the 
tariff  duties  these  very  men  will  contradict  their 
former  statements,  and  defend  the  absolute  neces- 
sity of  a  high  tariff.  It  is-  to  be  regretted  that 
the  favored  interests  do  not  break  loose  from 
their  old  moorings  and  strike,  for  what,  in  the 
long  run,  must  be  greater  prosperity  and  freedom. 
It  is  only  the  period  of  transition  from  a  higher 
to  a  lower  tariff  that  need  be  feared,  and  any  in- 
jurious effects  of  this  reaction  could  best  be  neu- 
tralized if  there  were  a  positive  assurance  that 
the  change  would  not  be  accompanied  by  the  loss 
of  credit  facilities.  The  government  is  responsi- 
ble for  the  tariff,  and  the  industries  fostered  by 
the  tariff.  It,  therefore,  should  take  into  con- 
sideration the  means  whereby  all  unnecessary 
losses  may  be  prevented. 


WHEN  REDUCTION  COMES       271 

The  old  ideal  that  we  can  separate  the  business 
interests  of  the  country  from  the  government  is 
unattainable  and  probably  in  its  last  analysis, 
vicious.  The  purposes  of  government  are  as 
broad  as  the  interests  of  civilization  itself. 
While  this  old  ideal  once  had  sway  in  England, 
it  has  lost  much  of  its  vitality  there,  and  on  the 
Continent  it  has  never  had  any  considerable  in- 
fluence. Only  among  the  doctrinaire  economists 
of  this  country  does  it  still  have  potency,  and  so 
long  as  we  take  this  attitude  will  the  protected 
interests  fight  for  what  they  conceive  to  be  their 
own  prosperity,  even  if  it  involves  a  loss  to  the 
rest  of  the  country ;  and,  in  the  long  run,  an  in- 
jury to  themselves.  The  influence  of  govern- 
ment in  promoting  or  retarding  prosperity  is 
quite  incalculable.  Sometimes,  as  under  the  pres- 
ent policy  of  protection,  it  hinders  the  very  pur- 
poses which  it  has  designed  to  promote;  but  in 
other  cases  it  has  a  beneficent  power  which  it  is 
useless  to  gainsay ;  and  among  the  most  power- 
ful and  essential  functions  of  government  is  the 
establishment  of  a  responsible  and  trustworthy 
banking  and  credit  system  having  to  do  with  the 
issue  of  money  and  such  substitutes  as  are  ac- 
ceptable to  the  public.  Private  credit  must  ulti- 
mately rest  upon  some  form  of  government 
guaranty,  whether  concealed  or  acknowledged. 
The  central  banking  system  is  the  most  direct 
form  of  responsible  banking.  Its  powers,  clearly 
expressed,  can  provide  for  almost  any  emergency 


272      THE  PASSING  OF  THE  TARIFF 

that  would  arise  from  any  fluctuation  in  the  level 
of  prices,  and  would  give  assurance  of  stability  in 
a  trying  period  of  transition. 


WORLD  ORGANIZATION 

BY    RAYMOND    L.    BRIDGMAN 

"  World  Organization  "  is  the  title  of  a  lit- 
tle book  by  the  author  of  "  The  Passing  of  the 
Tariff."  Its  purpose  is  to  promote  the  formal 
organization  of  all  the  nations  as  a  political 
unit.  It  affirms  the  political  unity  of  all  the  na- 
tions already  and  shows  that  there  is  in  operation 
already  an  unwritten  world  constitution.  In 
the  present  era  the  nations  are  developing  from 
that  constitution  a  written  one.  Already  the  fiat 
of  mankind  has  said :  *'  There  shall  be  a  legisla- 
tive department ;"  "  there  shall  be  an  executive 
department;"  "there  shall  be  a  judicial  depart- 
ment." Already  the  germs  of  these  separate 
departments  are  clearly  in  existence  and  the  world 
is  hastening  forward  at  wonderful  speed  to  their 
complete  development.  It  is  a  story  of  progress 
almost  incredible,  but  the  facts  are  official,  are  of 
record,  and  are  indisputable.  Peace  and  pros- 
perity unparalleled  await  mankind  in  the  orderly 
development  of  this  progress. 

A  few  of  the  many  words  of  commendation  of 
the  book  are  as  follows : 

Your  various  theses  strike  one  at  first  as  being  al- 
most too  bold,  but,  on  reflection,  promoted  by  reading 
of  your  pages,  one  becomes  convinced  that  you  are  a 
true  prophet. —  Andrew  D.  White,  Chairman  of  the 
United  States  delegation  to  the  Hague  Conference  of 
1899. 


Admirable  little  book. —  Prof.  James  Brown  Scott,  So- 
licitor of  the  Department  of  State  at  Washington  and 
delegate  to  the  Hague  Conference  of  1907. 

The  best  modern  essay  upon  constructive  internation- 
alism.—  John  A.  Hobson,  Economist,  in  London  Daily 
Neics. 

Most  fruitful  and  bracing  volume. —  Concord  (London). 

It  is  not  a  rhapsody  of  sentiment,  but  a  calm,  serious 
consideration  of  conditions  with  rational  deductions  from 
them,  not  pressed  unduly,  but  intelligently  and  fairly. 
.  .  .  We  know  of  no  other  book  which  covers  so  com- 
pletely and  instruetively  the  same  theme,  a  theme  of  grow- 
ing importance  in  all  civilized  states. —  Boston  Herald. 

Never  has  the  whole  method  of  world  organization  been 
so  clearly  and  forcibly  stated  as  in  this  little  book. — 
Lucia  Ajies  Mead. 

An  important  contribution  to  the  literature  of  peace 
and  progress. —  The  Arena. 

For  the  wealth  of  argument  and  sound  reasoning  which 
the  author  brings  to  bear  in  support  of  his  noble  and 
far-reaching  plan,  we  must  refer  the  reader  to  the  book 
itself. — L.  A.  MaynarDj  peace-worker,  in  Leslie's  Weekly, 

In  the  greatness  and  importance  of  its  ideas  no  more 
important  book  has  recently  appeared. — ■  The  Watchman 
(Boston). 

Not  since  the  days,  more  than  sixty  years  ago,  when 
the  great  essays  on  a  congress  and  court  of  nations  were 
written  by  Lacld,  Upham  and  others,  has  the  subject  been 
presented*  with  so  much  fulness,  perspicuity  and  cogency 
as  Mr.  Bridgman  has  presented  it  in  these  pages. —  The 
Advocate  of  Peace. 

Henceforth  it  will  be  merely  stupid  to  reply  to  the  advo- 
cates of  world  organization  with  a  gibe.  Mr.  Bridgman 
remains  firmly  planted  on  the  solid  earth;  he  gives  to  those 
who  are  always  demanding  facts  in  place  of  vapor  the 
most  concrete  "of  history  and  analysis. —  Manchester  (Eng- 
land)  Guardian. 

A  volume  that  has  had  nowhere  near  the  recognition  it 
deserves. —  Springfield    Republican. 

12    mo.    172    pp.     60 cents  net;  by  mail,  67  cents. 

GiNN  and  Company,  Publishers. 
Boston,  Massachusetts,  U.  S.  A. 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 

Los  Angeles 

This  book  is  DUE  on  the  last  date  stamped  below. 

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